17 March 2015

Concern grows over ship recycling methods

There is growing concern that the EU Ship Recycling Regulation (EU SRR) could undermine the Hong Kong Convention with regards to ship recycling methods.

The Hong Kong Convention aims to ensure that ship recycling does not threaten human health, safety, and the environment, whereas the EU SRR requests that European-flagged ships are recycled in pre-approved yards.

"The Hong Kong Convention is the ideal standard for ship recycling and should not be undermined [by the EU SRR]," said Yang Ming chairman Frank Lu at the Tradewinds Ship Recycling Forum in Singapore on 11 March.

However, the Hong Kong Convention has yet to be ratified, as it requires the endorsement of 15 states before it can enter force, whereas the EU SSR was implemented in December 2013.

Lu is also chairman of the Asian Shipowners Forum's ship recycling committee who have worked with the China National Ship Recycling Association to ensure their standards meet the Hong Kong Convention.

Chinese yards, which have dry docks for dismantling ships, are considered environmentally-friendly but the higher costs prevent them from offering competitive prices for tonnage, resulting in South Asia having the majority of global ship recycling.

"From a shipowners' point of view, China provides lower operational costs if the last port of call is in East Asia. And in NGOs' eyes, Chinese yards are greener. However, the disadvantages are the lower prices and a longer navigational time versus South Asia in some cases," Lu added.

"Although current methods in South Asia are viewed negatively by NGOs and may not yet comply with the [Hong Kong] Convention, South Asian yards can compete by offering high scrap prices and lower navigational costs for ships whose last port of call is in Europe or the Middle East," he said.

Shipowners usually sell their older tonnage to cash buyers, who re-sell the ships to recycling facilities. Lu pointed out that as legal ownership of vessels passes to cash buyers after the first sale, how ships are recycled is beyond the shipowners' control.

Lu said, "Shipowners should assess and select ship-recycling yards to demolish ships in a safe and environment-friendly [condition]. We should also continue to motivate recyclers to upgrade their yards to comply with the Hong Kong Convention.

Source: ihs maritime 360. 12 March 2015

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