(www.MaritimeCyprus.com) The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 (the âConventionâ) is aimed at ensuring that ships, when being recycled after reaching the end of their operational lives, do not pose any unnecessary risks to human health, safety and to the environment. The Convention was adopted in 2009 but is yet to enter into force.
Regulations in the Convention cover: the design, construction, operation and preparation of ships, to facilitate safe and environmentally sound recycling without compromising the safety and operational efficiency of ships; the operation of ship recycling yards (âfacilitiesâ) in a safe and environmentally sound manner; and the establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements.
Once ratified: ship recycling facilities will be expected to prepare a Ship Recycling Facility Plan in accordance with published guidelines ; and national authorities will be required to take measures to ensure that facilities under their jurisdiction comply with the Convention.
Effectively, this means that governments will be responsible for authorizing their own facilities, once the Convention enters into force.
European Ship Recycling Regulation:
The EU Regulation entered into force in December 2013. It applies to ships of at least 500GT flying the flag of an EU member state, and to ships visiting the EU flying the flag of a non-EU member state. The EU Regulation is mostly aligned with the IMO Convention but, most notably, it requires the establishment of a list of approved ship recycling facilities (the âEU Listâ).
Ships flying the flag of an EU member state can only be recycled at a facility on the EU List. Such facilities are required to meet the design, construction and operation requirements of the EU and can be located outside of the EU.
Facilities located inside the EU are required to apply to the European Commission (the âECâ) for automatic inclusion on the EU List.
For facilities located in third countries (i.e. those located outside the EU) requirements and procedures for inclusion on the EU List were published by the EC in a Technical Guidance Note. By applying for inclusion on the EU List, facilities located in third countries accept that they will be subject to on-site inspections by the EC, or agents acting on its behalf.
Brexit cuts EU List maximum potential capacity by EU member states by almost 600 000 LDT, a highly significant amount. However, it is noted that this is the maximum ship recycling capacity reached by the UK during the preceding 10 years, as provided by IMO statistics, and this capacity is rarely reached in practice.
Overall, the EU List includes many facilities that provide valuable services to the existing market and the inclusion of non-European ship recycling facilities is a step forward in the maturity of the EU List.
However, most EU member state facilities are not dedicated ship recycling facilities for the
International market. EU member state facilities, in general, provide either bespoke local solutions to a niche recycling market or are focussed on offshore decommissioning.
The market provision shows that recycling in EU member states is an unattractive proposition in the overall international market place and that facilities would far prefer to dedicate their energy and search for decent profit margins to either repair yard, newbuilding, and military or offshore recycling projects.
This leaves Turkey as the only major ship recycling nation contributing significant capacity to the EU List, with no facilities from India, Bangladesh or Pakistan included.
It appears that 1 facility in India is now acceptable to the EC auditors, although local infrastructure is not.
On top of the lack of European suitable shipyards, the price difference in steel will mean a loss of at least 150 USD per tonne, compared to recycling in an Indian yard, which could for example go to investing in more modern ships.
Industry stakeholders and shipowners continue in their support for China to re-enter international ship recycling, and to ratify the Hong Kong Convention.
This is an updated version of the previous report of the same name which was released by BIMCO in 2019. This new version has also been commissioned by BIMCO and provides updated information and observations on the establishment of the European List of ship recycling facilities (hereinafter referred to as âthe EU Listâ), relating to Regulation (EU) 1257/2013 of the European Parliament and the Council on ship recycling (hereinafter referred to as âthe EU Regulationâ).
This report updates the regulatory developments and status of the IMO Hong Kong Convention and further examines the declared work of the EU List facilities and the influence of Offshore Decommissioning. It is based on the latest EU List published in EUR-Lex on 11 November 2020, and therefore entering into force on 2 December 2020. This list adds new yards, tidies the list for defunct yards, updates details and expired certificate dates. It also anticipates the Brexit position when the transition period ends on 31 December 2020.
Lastly, please note that this report has been prepared based on current knowledge, experience, and relevant maritime media and it is not intended to detail economic calculations, environmental impact, or safety assessments.
Click below to download the full Report on the European List of Ship Recycling Facilities:
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