Mr. Leo Liu, our senior trader from GMS Shanghai, was the keynote speaker at the 8th Ship Trading & New Building Su… https://t.co/YYHxF542Ff

*

#ShipRecycling #MaritimeNews #Maritime #Shipping #Demolition https://t.co/IbkV63Jcvz

*

#ShipRecycling #MarketUpdate #Maritime #Shipping #Demolition https://t.co/7HzhODGANZ

*

#ShipRecycling Market - Week 30 - HOLD STEADY! When the Bangladesh market surpasses the USD 600/ton mark once agai… https://t.co/QCJtcvRSak

*

BLOG & PRESS RELEASE
Back To All Records

 


Awakening call to make regulations rationale for Sustainable Ship Recycling

Environmental issues are a growing concern for the maritime industry. Every industry should care about the sustainability of the environment and act responsibly, but stakeholders are often overwhelmed with multiple regulations created by various authorities worldwide. 

The IMO’s Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) adopted in 2009 is the most widely accepted regulation impacting sustainable ship recycling. But at present, though ratified by a few nations, the HKC has not officially entered into force yet.

The European Union brought the EU Waste Shipment Regulation (EU WSR) into force in 2006. As per the EU WSR, the export of hazardous waste from EU member states to any developing (Non-OECD) country is forbidden. It allows the export of hazardous waste(s) from the EU to OECD countries, subject to prior agreement between the exporting and importing countries. The EU tries to enforce the EU WSR on end-of-life ships by classifying the end-of-life vessel itself as hazardous waste. The EU also developed another regulation in 2013, the EU Ship Recycling Regulation (EU SRR), which came into force in 2018.

Both EU WSR and EU SRR  are more “stringent” (for non-EU recyclers) than the HKC. As a result, ship owners are often accused of illegality when selling their vessels even to HKC compliant yards in the Indian sub-continent and Turkey. They are forced to take excessive and unnecessary actions that are economically disastrous and, at times, environmentally irresponsible. This results in a lose-lose situation for the owners, regulators, buyers, and even the environment. Consequently, well-intentioned regulations lead to the opposite consequence in reality. In the following paragraphs, we will study two such cases:

CASE 1: 

In May 2014, the owner of a 1987-built PCC decided to sell his vessel for recycling. It reached the end of its service life in the Mediterranean Sea, and the owner considered both Turkish and Indian ISO-certified Green yards. As is generally the case, there was a considerable price gap of around USD 200/Ton between the Turkish and Indian markets. The sellers completed the last cargo voyage from Antwerp, Belgium, to a West African port. As the vessel was not EU-flagged, EU WSR or EU SRR should not have applied—even if it was departing from an EU port / EU waters on a final cargo run. But, since the decision to recycle the vessel was made while she was in an EU port, the ship was arrested at Antwerp, and authorities forced the owner to complete the required paperwork to export hazardous materials. This expensive and time-consuming process cost the owner, and on top of that, they had to pay compensation to the Indian yard to cancel the sale. In the end, they had to resell the vessel to a Turkish yard at a significant price reduction. Was this particular yard truly better than the Indian yard? Did the delays in the recycling of the vessel benefit society and the environment?

CASE 2: 

In Oct 2020, a 1989-built small PCC came close to the end of its service. The sellers decided to recycle the vessel in Turkey as their last discharge port was Autoport, Turkey. When the ship sailed out from Vigo, Spain, to transport the cargo to Autoport, the Belgian authorities intervened and declared that the vessel had breached EU WSR. They further stated that the decision to recycle the ship was made while she was in an EU port. As a result, the owner had to bring the vessel back to Spain, complete the notification formalities, and pay high compensation to the Turkish yard for canceling the deal. Apart from that, the notification process took the owners more than seven months to complete because of discrepancies in some of the information provided to the authorities. The owner thereby had to resell the vessel to an EU-listed Turkish yard with a massive reduction in the price. For the seven months, the sellers waited for the paperwork to clear, the ship IDLED. What are the economic and environmental costs of idling a vessel for SEVEN months? Is the EU-approved yard TRULY better than an HKC certified yard? Professionals in the field believe that a well audited HKC yard is BETTER than an EU-approved yard in Europe that does not have to go through strict audits. If this is the case, to whom is the EU SRR benefitting? The so-called guardians of the environment and the regulators who blindly follow them should be ashamed of a monster they have created that helps no one and harms the environment and workers they seem to be protecting.

The Good, The Bad, and the Ugly (HKC, WSR, SRR)

Without evading our responsibility to protect the environment, we should reconsider the grey areas in the prescribed regulations. To make business more efficient and uniform worldwide, the IMO HKC should be treated as the precise regulation for ship recycling. The implications of both EU WSR and SRR are punitive and designed to discourage owners from going to HKC compliant – the good – yards. In other words, while HKC has been a big step towards sustainable ship recycling, the EU regulation has slowed the adoption of sustainable ship recycling. This concern should be dealt with with the utmost urgency by all stakeholders. More importantly, we ask owners, advisors, and regulators not to bow to stupidity and fear headline risks when true courage is needed.

 

Author


Mr. Amit Malhotra

Senior Trader,
GMS Japan
Email: snp@gmsinc.net

 

Read More
July 17, 2019
 
Germany marks the 13th nation acceding to the Hong Kong Convention
 
Germany became the latest nation to accede to the IMO’s treaty for the safe and environmentally-sound recycling of ships—the Hong Kong Convention—yesterday in London. Germany’s accession marks the 13th contracting State to the Convention out of the 15 required as per the first of the three conditions for the Convention’s entry into force. These 13 countries represent 29.42 percent of the world merchant shipping tonnage—only 10.58 percent shy of the total required to satisfy the second condition of the HKC. The third and final condition requires that the combined maximum annual ship recycling volume of the countries that have ratified or acceded to the Convention is at least three percent of the gross tonnage of their combined fleets. The third condition will be met when two of the four remaining major ship recycling countries—India, Bangladesh, China or Pakistan—accede.
 
The Hong Kong Convention was adopted by Member States of the IMO over a decade ago with the goal to ensure that “ships, when being recycled after reaching the end of their operational lives, do not pose any unnecessary risk to human health and safety or to the environment.” Under the treaty, each ship sent for recycling will be required to carry an inventory of hazardous materials while each recycling yard will have to provide a detailed Ship Recycling Plan to establish transparent reporting procedures. Dr. Nikos Mikelis, non-executive director of GMS and former head of the IMO’s Ship Recycling section, comments on the significance of this accession and explains why India has a key role to play for the convention to officially enter force.
 
“Accession by Germany, one of the major shipping nations, takes the Convention a step closer to its entry into force,” explains Mikelis, who is considered to be the “father of the HKC” for his instrumental role in its development. “With Germany’s accession, seven countries have acceded to the Convention in the last six months, which is one more than those that acceded in the previous nine years. The acceleration in the recognition amongst shipping nations of the need for the Convention to enter into force the soonest possible probably reflects growing concerns over the enforcement of the regional European Ship Recycling Regulation since the beginning of this year. What remains now is for two of the major ship recycling nations to also accede to the Convention before the ship recycling industry can start operating under a uniform global regulatory regime. India, most of whose recycling yards have invested in infrastructure, training, and working procedures and have been certificated by IACS classification societies as compliant with Hong Kong Convention, now holds the key to the Convention’s entry into force.”
 
– END OF TEXT –
For further enquiries, contact us at: bd@gmsinc.net
 
 
ABOUT GMS
Founded in 1992 in the USA, GMS is the world’s largest Buyer of ships and offshore units for recycling. GMS has successfully negotiated several thousand assets since its inception—more than any other company in the industry. The firm's mission is to improve an asset’s residual value and improve international health, safety and environmental standards while generating awareness on the significance of responsible ship recycling in the maritime community. With nine international offices, an award-winning Responsible Ship Recycling Program, and a team of specialized experts, GMS continues to influence positive change in the global shipping industry.
Read More
June 20, 2019
 
Lloyd’s Register Becomes 4th Classification Society to Approve Indian Yards
 
 
 
European classification society Lloyd’s Register (LR) has begun approving recycling facilities in India that adhere to the safe and environmentally sound recycling of ships. This June, LR issued a Statement of Compliance (SoC) with the Hong Kong Convention (HKC) to Plot 24 E in Alang and sources say more yards are undergoing the auditing process.
 
LR joins Class NK, RINA and IR Class as the fourth classification society committed to further promote responsible recycling in India. As of now, almost 80 recycling yards in Alang have received a SoC with HKC from at least one of the major classification societies. These yards are globally certified to conduct green recycling based off the standards outlined in the IMO’s Hong Kong Convention. With LR now issuing HKC SoCs in Alang as well, yard owners have another reputable accreditation option to upgrade their recycling facilities to and become HKC compliant, potentially improving the quality and quantity of responsible recycling in India.
 
Dr. Anand Hiremath, lead coordinator of GMS’ Responsible Ship Recycling Program, comments on the impact this has for the future of green recycling in India. “Approval of SOC with HKC from Lloyd’s Register (LR) is good news for the industry and shows the growth of green recycling practices in Alang,” says Dr. Hiremath. “LR became the fourth IACS Class to accept (after ClassNK, RINA and IRClass) that ship recycling yards in India comply with the highest recycling standards. It is to be noted that two Turkish yards included in EU-List are also approved by LR for SOC with HKC. With 77 yards already having SOC with HKC in Alang—almost 60% of working yards—it wouldn’t be a surprise if Alang achieves 100% green recycling yards potentially by next year.”
 
 
– END OF TEXT –
For further enquiries, contact us at: bd@gmsinc.net
 

ABOUT GMS
Founded in 1992 in the USA, GMS is the world’s largest Buyer of ships and offshore units for recycling. GMS has successfully negotiated several thousand assets since its inception—more than any other company in the industry. The firm's mission is to improve an asset’s residual value and improve international health, safety and environmental standards while generating awareness on the significance of responsible ship recycling in the maritime community. With ten international offices, an award-winning Responsible Ship Recycling Program, and a team of specialized experts, GMS continues to influence positive change in the global shipping industry.
Read More


SCAN TO DOWNLOAD GMS APP

FOR