EU Ship Recycling Regulation: Update and reminder for all EU flagged ships

The Covid-19 pandemic and its impact on global trade has led to many shipowners selling off their ships for dismantling earlier than they might otherwise have done.

According to the NGO Shipbreaking Platform, 166 ships were broken up in the first quarter of 2020, and 98 ships in the second quarter. 

In December 2018, the UK Club published an article on the European Union’s Ship Recycling Regulations (ESRR) which entered into force on 1 January 2019. The Club now provides a brief update on the challenges faced by shipowners in complying with the ESRR when sending their end-of-life ships for recycling.

  • The Hong Kong Convention 2009 will only enter into force 24 months after ratification by 15 States, representing 40% of world merchant shipping by gross tonnage, with a combined maximum annual ship recycling volume of not less than 3% of their combined tonnage. The number of ratifying States has now reached 15 but together, the 15 States represent only 29.62% of world tonnage. End-of-life ships proceeding for demolition are therefore currently still subject to the ESRR, and the Basel Ban Amendment which bans the export of all hazardous wastes for any reason including recycling, from OECD to non-OECD countries1. The latter is enforced by the EU through its European Waste Shipment Regulation (“EWSR”).

  • The European List of ship recycling facilities (“the European List”) was last updated on 22 January of this year.  This is the 6th version of the list and the number of yards listed has increased to 41 of which 34 facilities are located in 12 EU Member States and in Norway, 6 facilities in Turkey and 1 facility in the United States.  According to the EU Commission, these facilities currently represent “a total available annual recycling capacity of nearly 2.85Mi Light Displacement Tonnes (LDT)” and several of the yards are able to recycle large vessels. The EU Commission has also received a number of applications from ship recycling facilities located in third countries including India and China but no facilities in India, China or any other South East Asian countries has yet to be formally added to the  list. Until yards in these countries are added to the list, shipowners’ recycling options will continue to be limited, particularly for larger vessels such as capesize bulkers, very large ore carriers, big tankers and large container ships2.  Please click here for additional details of the European List including a map of the 41 listed facilities, the applications received from third countries and site inspection reports of yards located in third countries.

  • The next deadline for all EU flagged ships, and all non-EU flagged ships calling at EU ports and anchorages, to have on-board an inventory of hazardous materials (IHM) is 31 December 2020.  In a recent article, BIMCO reported that the challenges brought about by the Covid-19 pandemic has meant that many shipowners may not be able to finalize the required IHM prior to this deadline. BIMCO and other shipping organisations have addressed a letter to the EU Commission outlining the challenges posed by COVID-19 to involved parties, especially shipowners. The letter requests the EU Commission to consider a time-limited implementation or grace period to enable shipping companies to complete the IHM process whilst coping with the COVID-19 restrictions and interruptions. If the 31 December 2020 deadline cannot be met, BIMCO recommends the development of IHMs on the oldest ships first. Old ships are in general more likely to be recycled and such a risk based planning will demonstrate how shipowners are working proactively in accordance with the spirit of the ESRR. Click here to read BIMCO’s article in full.   

  • BIMCO’s article includes a set of Guidelines for complying with the ESRR and for preparing an IHM. Members are also directed to the UK Club’s “Risk Focus: Inventory of Hazardous Materials” (click here) for additional guidance in the preparation of a ship’s IHM.

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Under the Basel Convention, an end-of-life ship proceeding for demolition falls under the definition of “waste”.

https://www.seatrade-maritime.com/regulation/owners-face-recycling-constraints-eu-regulations-limit-options


Jacqueline Tan

Date07/08/2020

Source Legal Services Manager