Shipping article(s)
May 9, 2022

The proposed changes to the European Union's (EU's) Waste Shipment Regulation will bring "legal clarity" to hazardous waste exports that will benefit South Asian shipbreaking yards seeking to gain compliance with EU recycling standards, according to sustainable ship recycling consultancy, Sea Sentinels.


In a statement, it said that ships that are sold for recycling at the end of their lifetime contain dangerous substances such as asbestos and mercury as well as toxic chemicals like oil, fuel, and ballast water that constitute a risk both to human health and the environment if they are not managed and disposed of properly.


Exports of hazardous waste to non-OECD countries in EU-flagged ships being sent for recycling are banned under the Basel Convention on transboundary shipments of such waste, which has been transposed into the EU Ship Recycling Regulation (EUSRR) that requires ships to be recycled at EU-compliant yards on an approved list.


But the Singapore-based Sea Sentinels — which specializes in safe and sustainable recycling of ships and offshore assets — said this has not prevented a number of shipowners from circumventing the so-called "Basel Ban" by selling ships to cash buyers who then rename these vessels and switch them to flags of convenience.


Sustainable recycling supervision

"By using cash buyers as middlemen, shipowners can obtain higher steel prices for scrap tonnage while also theoretically avoiding legal, financial, and other risks when selling their old ships for dismantling," the consultancy firm said, adding that this means formerly EU-flagged ships have ended up at yards, not on the EU-approved list where they may be dismantled in a manner that poses the risk of toxic spills and other types of pollution to coastal ecosystems, as well as hazards to the health of workers.


Sea Sentinels' chief executive Rakesh Bhargava believes that the EU's proposed amendment to the Waste Shipment Regulation (WSR) would, if approved, represent "a significant step forward" as it would strongly incentivise continued improvements at these yards to gain EUSRR compliance.


The proposal would also impose stricter rules on exports of hazardous waste to non-OECD countries intended to ensure that facilities receiving this waste have been audited and can manage it sustainably.


"Importantly, this amendment distinguishes between EU-flagged ships on which the decision to recycle is taken inside or outside EU territory — and basically allows for those sold for scrap outside the bloc to be recycled at non-OECD facilities provided these are on the list of EU-compliant yards," the group added.


EU policymakers are set to discuss the proposal this spring, with a vote due by year-end on the WSR amendment that would also result in changes to waste shipment rules under the EUSRR if it is ratified.


Sea Sentinels noted that the European Community Shipowners' Association (ECSA) is lobbying strongly in favour of the amendment that it believes would resolve a legal anomaly whereby non-OECD yards are currently unable to receive EU-flagged ships for recycling — even if they are fully EU-compliant  due to the Basel Ban. 


"The EU proposal would bring much-needed legal clarity to what has been a long-standing murky issue on the export of hazardous waste to shipbreaking yards in non-OECD countries," Sea Sentinel's Bhargava said, noting that a number of non-OECD yards have made significant progress towards EU compliance by upgrading their facilities in line with the required health, safety, and environmental standards.


"It is important that these are able to compete on a level playing field with European yards given that around 70% of ship tonnage recycled worldwide is already dismantled at South Asian yards," the Sea Sentinels' chief further said.


"Furthermore, there is a lack of capacity for recycling of larger ocean-going ships at yards on the EU-approved list so it is imperative that South Asian yards continue to have an incentive to gain compliance for inclusion on the list."


Limited EU capacity

The current EU list of 41 recycling facilities comprises mainly European yards, most of which are limited in terms of length and draft of the vessels they can handle and are also primarily engaged in more profitable offshore/military decommissioning or repair and conversion work.


Bhargava says that, due to the lack of EU-compliant recycling capability, owners of larger EU-flagged vessels are often left with no alternative but to have these reflagged so they can be sent to South Asian yards that have the required capacity.


Environmental risk mitigation


On-site supervision and monitoring of the recycling process by an independent third party with the requisite expertise are therefore essential to enforce regulatory requirements and ensure documented compliance for the shipowner, regardless of location, according to Bhargava.


"From an environmental perspective, a lot of the focus in shipping is currently on reducing greenhouse gas emissions from operating ships. But equally important is the need to manage hazardous waste disposal for end-of-life vessels to prevent pollution to coastal waters and ecosystems," he said.


"Therefore, having a sustainable ship recycling policy with reliable low-cost supervision and enforcement represents a commercial advantage in the long run," the Sea Sentinels' chief added.

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