EU: Financial Incentive Could Enhance Sustainable Recycling

Ships regardless of their flag should not be allowed to call at any EU port without a ship recycling license to incentivise sustainable ship recycling, the NGO Shipbreaking Platform cited a report from the European Commission.

The report, written by Ecorys, classification society DNV-GL and the Erasmus University School of Law, looks into the possibility of introducing a financial incentive to enhance safe and environmentally sound ship recycling.

Ship recycling license fees would be earmarked to cover the cost-gap between substandard and sustainable end-of-life ship management. The capital amount accumulated during the operational life of the vessel would be set aside for the ship and only paid back to the last owner of the vessel as a premium if the ship is recycled in a sustainable facility approved by the EU.

“We call on the European Commission to follow-up this report with a legislative proposal. The effective implementation of European environmental policies has been dependent on making the ‘polluter pay’. If the EU is serious about its commitment to sustainable ship recycling, all ship owners trading in Europe need to be held financially liable,” Stephane Arditi, Products & Waste Policy Manager of the European Environmental Bureau, said.

The 2013 EU Ship Recycling Regulation requires all vessels sailing under an EU flag to use an approved ship recycling facility. A major shortcoming of the Regulation, however, is that shipowners can circumvent the law by simply flagging out to a non-EU flag.

At end-of-life, cash-buyers act as intermediaries and sell the vessels to substandard yards in South Asia often using flags of convenience which are grey- or black-listed by European governments under the Paris Memorandum of Understanding.

Last year, Bangladesh, where human rights abuses and pollution caused by shipbreaking activities are known to be the worst, was the preferred destination for end-of-life ships.

EU owners account for around one third of the end-of-life tonnage beached in substandard yards in Bangladesh, India and Pakistan.

“EU shipping companies should not circumvent EU environmental laws and not utilise practices that would never be allowed in Europe. EU flag-neutral measures which apply equally to all ships calling at EU ports are necessary to increase environmental protection,” Sotiris Raptis, shipping and aviation officer at Transport and Environment, said.