Roadmap for Ship Recycling Sector Sustainability

Impact of global legislation on key ship recycling hubs scheduled for high-level debate at Seatrade Middle East Maritime 2014

By MarEx 2014-10-08 11:22:00

The environmental and human safety cost of ship recycling as well as the formulation of stringent new legislation that is putting additional pressure on shipyard operations around the globe will be addressed during a special session at the seventh biennial Seatrade Middle East Maritime (SMEM) summit and exhibition, which is part of the Dubai Maritime Week, hosted by Dubai Maritime City Authority (DMCA) and will take place in Dubai from 28-30 October 2014.

The day three session, scheduled for 2-4 pm, will present an up-to-the-minute picture of the current issues and key concerns facing ship recyclers, and use case studies to discuss practical solutions, with a focus on hazardous waste management developments, general health and safety, environmental management and the international regulatory environment.

“Decommissioned vessel recycling has always been part of the maritime life cycle, but with increasing importance being placed on sustainability in terms of both environmental and human safety, plus the advent of new international legislation, the way in which breakers yards around the world operate and the challenges that they face, is a pressing agenda issue,” said Chris Hayman, Chairman of Seatrade, organizers of Seatrade Middle East Maritime.

The International Maritime Organisation’s (IMO) Hong Kong Convention for the Safe and Environmentally Friendly Recycling of Ships (2009) set out a roadmap for increased worker safety and environmental protection but has yet to be fully ratified.

In December 2013, the European Commission (EC) took its own steps to add momentum to the movement for change with drafted regulations introduced to ‘force’ ship recycling yards to improve the standard of their operations and technical capabilities in order to make it onto an approved facility list for the scrapping of EU member state vessels. 

The regulations, which went live in January 2014, extend beyond the HKC mandate stipulating that ships must be dismantled using a ‘built structure’ with an impermeable floor to contain hazardous waste leakage. This has raised red flags in India, Pakistan and Bangladesh with concerns that the beaching of EU-registered vessels could potentially be restricted or even banned.

“The IMO’s HKC focuses on motivating investment and activating improvements across the recycling sector to achieve long term sustainability goals, and relies heavily on voluntary commitment to change, but with the EC regulations causing a wave of consternation amongst many industry operators, SMEM 2014 presents a unique opportunity to debate what needs to be done and our panel of industry experts will provide practical insight,” noted Hayman.

Moderated by Bernard Veldhoven, Secretary General, International Ship Recycling Association, the panelist line-up includes Rakesh Bhargava, Head Green Recycling & IHM Services, Wilhelmsen Ship Management; Vagelis Chatzigiannis, SNP Trader, Green Ship Recycling Co-ordinator, Global Marketing Systems (GMS); Keyur Dave, Chief Financial Officer, Wirana Shipping Corp., Singapore ; Stephen Drury, Partner, Holman, Fenwick & Willan; and Ali Lakhani, Director, Dubai Trading Agency, UAE.

In a 2013 report, Lloyd’s List also identified an emerging trend for cash buyers bringing in commercial brokers to ensure vessels’ last cargoes are discharged as close as possible to the scrapping location.

The report, which analysed the last voyage origins of recycled ships in 2012, noted that Turkish yards were securing dismantling rights for an increasing number of vessels that had cleared their final cargo in Europe, highlighting the fact that this left owners of smaller vessels reluctant to pay for refueling and Suez Canal fees to send them to the Indian subcontinent for scrapping.

A total of 256 ex-service vessels were scrapped in China in 2012 according to the report, with the top five destinations of call named as South Korea, Indonesia, Taiwan, Russia and Malaysia; collectively accounting for 55% of final voyage origins. According to the China National Ship Recycling Association, the country dismantled 2.5 million tons of scrap vessels in 2013, up 4.6 percent from the previous year.

“China experienced a significant domestic slowdown for scrap steel in 2013 with the relatively high cost of its environmentally-friendly breaking methods also a mitigating factor despite government initiatives to encourage more vessel dismantling by 2015,” said Hayman.

It was also the country of origin for the last voyage of 7% of all ships recycled in 2012 (100 vessels), beaten only by the UAE with 104 ships. For Bangladesh’ recycling yards it was the top country of origin, accounting for 25% of all vessels, and also made the top three in India and Pakistan.

“India recycled 494 vessels in 2012, with the last voyage origin led by the UAE followed by China, Sri Lanka, Malaysia, Singapore and Iran. With its position as the largest global recycler for the last few years in terms of volume, India’s ship recyclers are a vital cog in the implementation of industry improvements to support the IMO HKC as we move towards the end of the decade,” added Hayman.

Held under the patronage of HH Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, SMEM is the largest event in the regional calendar, with more than 7,000 participants from 67 countries expected to attend following a record turnout in 2012. SMEM 2012 welcomed 7,065 attendees, 242 exhibiting companies from 33 countries and covered exhibition floor space totaling 4,338 square meters - a 7% increase on 2010.

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