Op-Ed: Indian Shipbreakers Should Be On EU Recycling List

In 2011, the European Union decided to develop a regulation specific to ship recycling because the European Commission found that the EU Waste Shipment Regulation 1013/2006 was not effective, as most ships under its purview managed to evade the regulation. Therefore, the European Regulation on Ship Recycling 1257/2013 (EUSRR) was brought into force on December 30, 2013.

The EUSRR is scheduled to enter into effect on December 31, 2018. This means that large commercial seagoing vessels flying the flag of an EU member state will only be allowed to recycle in a ship recycling facility included in the so-called "European List of ship recycling facilities." This list was established by the European Commission in December 2016 and was later updated in May 2018.

As of now, all yards in this list are located within the European Union, and the Commission is in process of reviewing the applications received from the yards of "third countries" outside of the EU. The Commission received applications from two yards in the U.S., four yards in China, seven yards in Turkey and nine yards in India in mid-2016. However, no decision has been made on their inclusion in the list yet.

Since China has announced a ban on importing foreign-flagged vessels for recycling, applicable from January 1, 2019, the inclusion of Chinese yards on the European List is no longer feasible. At the same time, since Indian yards have made considerable progress in terms of HSE with respect to the standards set by the Hong Kong Convention (HKC), they are a frontrunner to be included in the European List along with the Turkish yards.

The fact that both the Turkish and Indian yards hold Statement of Compliance (SoC) with the HKC issued by IACS member classification societies (Turkish yards by Class NK and Lloyds Register and Indian yards by Class NK, RINA and IR Class) testifies to the level of standards in both places. Also, both Indian and Turkish yards which have applied for the inclusion in the European List are certified by independent verifiers (IACS member classification societies) as meeting the standards of the EUSRR.

The standards set by the EUSRR are similar to those set by the HKC except for two additional requirements for facilities – to "operate from built structures" and to handle hazardous materials and waste, generated during the ship recycling process only on "impermeable floors with effective drainage systems." Some of the yards in India holding SoC with the HKC meet both these requirements and can be considered for inclusion in the European List of approved yards. Moreover, some yards in India are also equipped with heavy lift cranes fitted close to the inter-tidal zone. These cranes can reach from forepeak to aft of the vessel and can be used to lift every block to be placed on an impervious floor meeting the EUSRR requirements.

Apart from this, the yards in Alang, India are suitable for inclusion in the European List because they are supported by government approved downstream waste management facilities. This includes provisions for the proper disposal of asbestos, batteries, bilge water, electronic waste, cables, bio-medical waste, ODS, smoke detectors, oil and oily waste, oily rags, sand, sludge and other waste streams.

If Indian yards are not included in the European List, not enough recycling capacity will be available for shipowners with EU-flagged vessels to dispose the end-of-life tonnage. Moreover, the offer price of end-of-life ships in Turkey is much less than what is offered by HKC-compliant yards in India, which makes India a preferred destination for ship owners looking to recycle obsolete vessels in a cost-effective and environmentally friendly manner. The inclusion of Indian yards in the European List will also be an incentive for the investment made by these yards in improving infrastructure and working practices. At the same time, this will motivate other yards in India to upgrade their facilities, which will facilitate the further improvement of the industry in Alang, India.

The ship recycling industry is awaiting the decision by European Commission on the inclusion of non-EU yards in the European List. This decision will shape the future course of the industry in the same way as the EUSRR catalyzed the growth of the HKC-compliant yards in India. This choice must be pragmatic; otherwise, the EUSRR may become an ineffective legislation, as shipowners can always reflag their vessels to a non-EU flag in pursuit of a better price for a similar set of HSE standards of recycling.

Dr. Kanu Priya Jain and Dr. Anand Hiremath are with the Responsible Ship Recycling Department at GMS, a leading cash buyer of tonnage for recycling.