In Shipbuilding News 07/04/2015
European, Turkish and Chinese ship breakers are set to benefit from strict new EU laws on scrapping old ships, potentially significantly impacting South Asian beach scrap yards.
Of 1,026 ocean-going ships scrapped in 2014, 641 were broken up on beaches in India, Bangladesh, and Pakistan, according to figures from the NGO Shipbreaking Platform.
Cargo ships and cruise liners that have reached the end of their useful life are driven at full speed onto beaches and stripped down by hundreds of unskilled workers using simple tools with little health and safety measures or environmental protections.
Chemicals routinely leak into the ocean when the tide comes in and there is a huge human cost, according to the Tata Institute of Social Sciences in Mumbai, which estimates that during the last 20 years 470 workers have been killed in Alang-Sosiya, the world’s largest stretch of ship-breaking beaches.
Almost half of all scrapped ships are sent to the beaches of Alang, known as the graveyard of all ships.
Karmenu Vella, European Commissioner for the Environment and Maritime Affairs, says “the shameful practice of European ships being dismantled on beaches” will be ended with the introduction of the new law.
The measure will require that EU-registered ships be scrapped only at sustainable facilities with proven safeguards for the environment and its workers.
An approved list of ship breakers is expected to be published next year and is likely to include yards in China, Turkey, North America and the European Union, but not South Asia.
“The European list will split the market into a safe and substandard market,” says Patrizia Heidegger of Shipbreaking Platform.
It will be the first large-scale implementation of the International Maritime Organization’s 2009 Hong Kong convention on ship recycling, which until now has only been ratified by three countries: Congo Republic, France, and Norway.
The incentive of ship owners to sell their decommissioned vessels to South Asian ship breakers is huge, as their lenient rules for disposing of asbestos and other forms of waste make the profits for breaking up a ship higher.
The ship owner therefore gets a better scrap metal rate based on the tonnage of the vessel. For South Asian yards it can be a difference of almost 50%.
To counter this incentive, the European Commission is looking at ways to reward ship owners for recycling their vessels at approved facilities, although no details have been announced.
Indian shipyard owners saw the new rules are merely a ploy to fill empty yards in Europe because less than 4% of all scrapped ocean-going ships were broken up at European facilities in 2014.
European shipping groups such as Denmark’s Maersk and Germany’s Hapag-Lloyd have pre-emptively adopted policies to recycle only at facilities that meet international environmental standards.
