The maritime industry faces significant challenges due to conflicting EU ship recycling regulations, which are impacting shipowners and recycling facilities worldwide
Shipping is facing a significant challenge due to contradictory European Union (EU) legislation on ship recycling. As shipowners navigate these complex regulations, the potential for legal and financial repercussions has become a pressing concern.
The Hong Kong Convention (HKC), adopted by IMO in 2009, aims to ensure that ships being recycled do not pose unnecessary risks to human health, safety, or the environment. The convention will enter into force on 26 June 2025, following recent ratifications by Bangladesh and Liberia, among others. The HKC requires that ships carry an inventory of hazardous materials and mandates recycling facilities to provide a Ship Recycling Plan tailored to each vessel.
Conversely, the Basel Convention, which regulates the control of transboundary movements of hazardous wastes and their disposal, presents a different set of requirements. A significant conflict arises with the so-called ’Ban Amendment,’ which effectively prohibits the export of hazardous wastes from EU member states to non-OECD countries. This poses a challenge for shipowners who need to comply with both the HKC and the Basel Convention.
“The current legal landscape creates uncertainty that can hinder efficient ship recycling”
BIMCO, the world’s largest shipping association, has been vocal in advocating for legal clarity. In a submission to the IMO’s Marine Environment Protection Committee (MEPC), BIMCO, along with several governments and the International Chamber of Shipping, highlighted the legal uncertainties that shipowners face. "The ratification of the Hong Kong Convention marks the beginning of a new era for the ship recycling industry. We must make sure that legal obstacles and conflicts between the two conventions governing the safe and sound recycling of ships do not limit the scope of this historic opportunity," said BIMCO secretary general, David Loosley.
The EU Ship Recycling Regulation (EU-SRR), effective since 2013, adds another layer of complexity. It stipulates that EU-flagged vessels can only be recycled at facilities included on the EU’s whitelist of approved recycling yards. However, the Basel Convention’s restrictions have prevented the inclusion of many South Asian yards, which have significantly upgraded their facilities to meet international standards. This has left shipowners in a quandary, as noted by Sea Sentinels, a Singapore-based ship recycling consultancy, which reported that several yards in India and Bahrain have applied for EU approval but face hurdles due to the Basel Ban.
In an effort to resolve these conflicts, the European Parliament and the European Council have recently agreed on amendments to the EU Waste Shipment Regulation. This proposed change would allow exports of hazardous waste, including that contained in ships, to non-OECD countries, provided the receiving facilities can document sustainable management and disposal practices in line with EU regulations. This agreement, however, still requires formal adoption by both the Parliament and the Council.
The implications of these regulatory conflicts are significant. Shipowners risk sanctions for non-compliance, and the current legal landscape creates uncertainty that can hinder efficient ship recycling. As BIMCO pointed out: "It would be unjust to prohibit ships from being recycled at yards that meet the HKC standards, especially considering the vast improvements made over recent years and the need for steel in these developing economies."
Looking ahead, the industry anticipates a surge in ship recycling volumes, with BIMCO predicting that 15,000 vessels will be scrapped by 2032. This underscores the urgent need for a harmonised regulatory framework that balances environmental protection with practical industry needs.
The conflicting regulations surrounding ship recycling will be discussed at the Riviera Maritime Media event Responsible Ship Recycling Forum 2024 being held in Brussels, 29 May 2024. Sign up for updates here.]
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