Market mettle needed on variable recycling standards and iron-clad compliance

Founder of Auld Partners and former shipping banker, Robin Das, highlighted a fundamental shift in recycling responsibility affecting major shipping companies.

"I started looking at these issues about five years ago from a European perspective, a financing perspective, a larger owner perspective. I started off with the slightly naive view that this industry is bad, it needs to do better. Over the last five years, one of the things I’ve learned is that it isn’t all quite as black and white as I thought it may be."

His primary concern centred on the looming challenge for container shipping. "The recycling industry has not been able to improve over the last five years, because the shipping industry has done extremely well. So there is a dearth of ships that has been recycled," Mr Das explained. "One of the bigger challenges for the industry is what happens when the container liner operators market turns down. Many ships are not going to have a use. That downturn of the market will happen, it’s not a question of if, it’s a question of when."

This presents unprecedented challenges for major shipping companies. "Previously, if you were a very large shipping company, your solution to dealing with ship was to make it someone else’s problem," Mr Das explained. "You sold the ship when it was under 15 years, and it became someone else’s issue."

Mr Das predicted this approach would become increasingly untenable. "Many owners that never used to have to think about recycling ships are going to be driven into that direction, which means they need to think about their business differently," he suggested.

"If you are a major container line and suddenly there’s a big wave of ships you need to recycle in a compliant way, unfortunately there’s not going to be enough capacity in the market," Mr Das warned.

Principal at DEDRA.One, Detlef Drafz, brought a materials science perspective from his 30 years in recycling, encouraging the industry to fundamentally reframe its approach.

"I look at this differently,” Mr Drafz said. “This sounds to me as if the recycler is the undertaker. For me the recycler is the midwife – recycling means the thing gets prepared for a new life."

Mr Drafz advocated for a greater focus on maximising material value throughout the recycling process. He emphasised both material quality and optimised recycling have a direct impact on economic outcomes. Achieving this requires sophisticated material management. While understanding the complexity of these materials presents challenges, it also offers significant opportunities – particularly the potential to maximise top-line income. This is essential not only to cover the additional costs of regulation but also to enable the fair distribution of sales proceeds within the supply chain and, where appropriate, between shipowners.

The panel urged shipowners to adopt strategic approaches to end-of-life planning. "You have to have ironclad discipline," Mr Roche advised. "You have to have a system. You must stick with it. It is not sufficient to pretend you’re making one decision while you’re actually making another."

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