The end of life of a ship is – similar to living beings – something we sometimes deal with unwillingly or too little. The vessel has done its job, made profits at best, and now has to quit. When we talk about recycling ships, most of us have images in mind of ships being steered full speed ahead onto beaches to facilitate dismantling, the so-called beaching process. While this is still common practice in countries like Bangladesh, India and Pakistan, it is surely not a suitable or sustainable approach to managing a growing number of end-of-life ships. Indeed, it is dangerous and sometimes deadly.
After a reported significant drop in terms of the number of ships scrapped by South Asian shipbreaking yards, numbers are expected to increase again. While high ocean freight rates made it profitable to continue operating older vessels for some time, the IMO’s recently adopted carbon regulations, EEXI and CII, may turn the table.
The German Shipowner’s Association said that it even expects a shortage of tonnage due to the new indices. A poor rating of ships in terms of emissions and efficiency, and thus declining asset profitability, may cause owners to take ships out of service prematurely and recycle them. Demand for suitable facilities will increase, but what is a suitable facility?
The IMO’s Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships which aims to ensure that ships, when being recycled, do not pose any unnecessary risk to human health and safety, or to the environment, has still not been ratified – 14 years after being adopted. Portugal’s recent signing of the Convention brings the number of ratifying countries to 20 (15 are required); however, the necessary 40% of world merchant tonnage that has to be represented by the ratifying countries has still not been reached. A change of mindset in China could tip the scales here. But even if the figures are right, it will still take another two years until the Convention actually enters into force.
Frustrated by the lack of take-up on the IMO’s Convention, the European Union decided to set up its own regulatory regime in 2013. Under the EU Ship Recycling Regulation (EU SRR), ships flying the flag of an EU member state or third-party flagged vessels calling at European ports can only be recycled at facilities which have been approved under the EU’s own auditing process.
According to official numbers, the EU List, which names approved facilities, included 46 sites in mid-2022. Since 2016, 27 Indian ship recycling facilities – a major hub for scrapping – have applied to join the EU List, but none has been accepted.
So, as things stand, the affected owners only have access to a few EU-validated facilities in Aliaga, Turkey, and a handful of small recycling yards in other parts of Europe where labour costs are high and there is almost no market for scrap steel. A bottleneck is therefore to be expected here sooner or later, which leaves little room for manoeuvre or other options.
Latest approaches, among others also in northern Germany, to draw attention to the problem and above all to point out that there are modern shipyards there which could easily recycle the raw materials, currently still recegoogleive too little hearing and come to nothing.
However, it is essential to pay close attention to this aspect of shipping – the end of a ship’s lifecycle – in order to adopt safe and sustainable processes for shipowners, recycling yards, and authorities.