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Ship recycling

Priority KVNR: The Hong Kong Convention is the way forward

Shipowners:

“With the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships entering into force on 26 June 2025, an international level playing field will be established. It is, therefore, wise to review the application of the current European Ship Recycling Regulation.”

KVNR - Niels van de Minkelis - Nautische en Technische zaken - web
Contact

 

Niels van de Minkelis
Technical and Nautical Affairs

+31 6 4824 0287
+31 10 2176 282
minkelis@kvnr.nl

KVNR - Nathan Habers - Public Relations, Crisisco├Ârdinatie en Geopolitiek - web
Press inquiries

 

Nathan Habers
Public Relations


+31 10 2176 264
habers@kvnr.nl

Context

Dutch shipowners recycle hardly any ships. If they do, then they recycle them in a way that is responsible for both human welfare and the environment, without transferring the flag state registry (reflagging). This has been confirmed by the annual figures from recent years from the NGO Shipbreaking Platform.

Dutch shipowners recycle hardly any ships and if they do, they have their ships recycled in a way that is responsible for people and the environment, and without re-flagging (changing the status of the ship’s flag register). This has also been confirmed in recent years by the annual figures from the NGO Shipbreaking Platform.

To truly regulate ship recycling properly and effectively on a global scale, the international shipping community, including the KVNR, has been stressing for years that global regulation is needed rather than regional regulation (such as the EU Ship Recycling Regulation). The Hong Kong Convention that will come into force on 26 June 2025 provides that global regulation. The treaty ensures the safe and environmentally responsible recycling of marine vessels worldwide, while keeping the playing field level. As a result, the regional European Ship Recycling Regulation will become redundant and should be repealed. This is also to avoid legal discrepancies. The convention can be amended, and if necessary tightened, after its entry into force. It is wise to review the application of the European Ship Recycling Regulation (regional regulations). The EU could make proposals for this, if the EU then finds it necessary.

It is positive that ships are recycled and that almost every part of a ship can be reused. However, in some countries, the way ships are recycled leaves much to be desired. This involves the protection of worker safety and the environment. This is why there are international and regional regulations governing the recycling of seagoing ships.

Hong Kong International Convention
The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (‘Hong Kong Convention’), adopted in 2009, sets adequate requirements for ship recycling that apply globally to ship recycling companies and ship owners. This convention will enter into force on 26 June 2025.

The challenge

While the European Ship Recycling Regulation, which came into force in 2013, has many similarities to the Hong Kong Convention, it is less effective and does not provide a global level playing field.

Furthermore, EU Member State-flagged ships may be recycled within the EU only at a ship recycling facility approved by an EU Member State or outside the EU only at a ship recycling facility approved by the European Commission. These ship recycling facilities can be found in a European list of ship recycling facilities approved by the EU to recycle EU-flagged seagoing ships.

With the Hong Kong Convention entering into force on 26 June 2025, it is wise to review the application of the current European Ship Recycling Convention.

State of play - 26 June 2023

The EU periodically publishes the European list of ship recycling facilities approved by the EU to recycle EU-flagged seagoing ships. This updated list came into effect on 11 August 2021. The list consists of two parts. Part A contains the ship recycling facilities located in an EU member state. Part B contains the ship recycling facilities located outside the EU in so-called ‘third countries’.

First of all, the KVNR notes that this list is mostly theoretical ship recycling capacity. It also strikes us that outside the EU there are far fewer opportunities for EU-flagged ships to be recycled than within the EU. Consequently, there are too few EU-approved ship recycling facilities outside the EU to achieve geographically widespread coverage around the world.

In November 2020, the European Commission found that the EU Ship Recycling Regulation is not effective because many EU-flagged ships are re-flagged to a non-EU flag just prior to recycling.

According to the KVNR, the limited actual capacity available within Europe and the too limited possibility to have a ship recycled outside the EU could be partly to blame. The KVNR – just like other parties representing shipowners – pointed out years ago when the regulation was being drafted that regional regulations were not a solution to global problems. The international Hong Kong Convention and not the European Ship Recycling Regulation is the right instrument to regulate ship recycling. This is the first reason why the EU Ship Recycling Regulation is ineffective. In addition, it must unfortunately be noted that the number of EU-approved dismantling yards within and especially outside the EU is lacking in terms of both capacity and geographical spread. The KVNR – like other parties representing shipowners – has expressed concerns about this for several years. EU-flagged ships mostly sail worldwide and shipowners worldwide need to be able to have their ships recycled responsibly. Unfortunately, the ship recycling facilities approved by the EU are mainly located within the EU and only a few ship recycling facilities are located outside the EU. It is unfortunate that the EU has imposed strict recycling requirements on EU-flagged ships and on ship recycling facilities, but has not helped to create sufficient opportunities for responsible recycling inside and especially outside the EU. And by that the KVNR means:

  1. Sufficient ship recycling capacity. This is not just a sum of all theoretical ship recycling capacity in light displacement tonnes (LDT), but is also about the dimensions of ships and ship recycling facilities. For example, not every 300-metre ship can be recycled at every ship recycling facility.

  2. Adequate geographical distribution (worldwide) of EU-approved ship recycling facilities. This is to avoid a situation where a shipowner has to make a complete round-the-world trip for their ship to reach an approved ship recycling facility. In some cases, a ship needing to be recycled simply cannot make a round-the-world voyage. Re-flagging to a non-EU flag is then often an obvious and sometimes even the only possible solution.

The European Commission indicated in November 2020 that the current EU Ship Recycling Regulation needs to be reviewed and adjusted:

  1. The European Commission wants to add a financial incentive to the regulation that will remove the financial advantage of recycling at a ship recycling facility that is not approved by the EU (so-called ‘brown recycling’), compared to recycling at a ship recycling facility that is approved by the EU (‘green recycling’).
  2. The European Commission also wants to broaden the scope of the regulation by adding the concept of ‘EU beneficiary ownership’ to the regulation.

The European Commission also proposes that this revision of the regulation be completed by 2023.

The KVNR believes that:

  1. The EU should refrain from a financial incentive that removes the financial advantage of recycling at a ship recycling facility not approved by the EU compared to recycling at a ship recycling facility approved by the EU.
  2. Instead, the EU should focus on:
    1. increasing the capacity of EU-approved ship facilities. Ensuring enough ship recycling facilities in number and size (to accommodate ships of all sizes) that are well distributed around the world.
    2. improving the way ships are recycled in Southeast Asia. And, in particular, not on the de facto removal of the local industry in this region by establishing a financial incentive that will stop shipowners having their ships recycled there. The EU should help turn ‘brown recycling’ in Southeast Asia into ‘green recycling’, rather than eliminating ship recycling in Southeast Asia.
  3. The EU should not expand the scope of the regulation from EU flag to ‘EU beneficiary ownership’.