The global shipping industry is confronting the challenge of aligning ship recycling practices with evolving environmental and safety standards. As the average age of the global fleet rises, with nearly 30% of vessels surpassing 20 years, the demand for sustainable ship recycling has intensified. This transition presents legal risks and green opportunities that demand careful navigation.
Key Challenges in Ship Recycling
- Environmental and Worker Safety Issues
- Over 90% of shipbreaking occurs in South Asia, where weak regulatory oversight contributes to environmental pollution and hazardous working conditions.
- Older ships often contain toxic materials like asbestos and heavy metals, posing health risks and contaminating ecosystems.
- Regulatory Violations
- Reflagging Practices: Shipowners often reflag end-of-life ships to avoid stringent regulations, sending them to less regulated facilities in South Asia.
- Sanctioned Vessels: Recycling ships subject to sanctions poses legal and logistical obstacles, creating potential for environmental neglect or abandonment.
- Global Disparities
- Developed nations impose strict recycling standards, but many facilities in developing countries lack the capacity or willingness to meet these benchmarks.
Key Regulatory Frameworks
- Basel Convention
- Controls transboundary movements of hazardous wastes, including ships.
- The 2019 “Ban Amendment” prohibits exporting hazardous waste from OECD to non-OECD nations.
- Hong Kong International Convention (HKC)
- Sets global standards for environmentally sound ship recycling, requiring an Inventory of Hazardous Materials (IHM).
- Entering into force on June 26, 2025, following recent ratification milestones.
- EU Ship Recycling Regulation (ESRR)
- Imposes stricter requirements for EU-flagged ships, mandating recycling only at EU-approved facilities adhering to higher safety standards.
- EU Waste Shipment Regulation (EWSR)
- Modernized in 2024 to enhance traceability of waste shipments and prevent illegal exports from the EU.
Green Opportunities and Innovations
- Sustainable Recycling Practices
- Dismantling ships to minimize environmental impact and maximize material reuse aligns with circular economy principles.
- Use of advanced technologies to reduce hazardous waste and improve safety.
- Ship Recycling Transparency Initiative (SRTI)
- Promotes accountability and transparency by encouraging shipowners to disclose recycling policies and practices.
- Drives industry-wide competition to meet higher environmental and safety standards.
- Innovation in Recycling Facilities
- Investment in green ship recycling yards that comply with international norms.
- Development of infrastructure for handling hazardous materials safely and sustainably.
Navigating the Legal Landscape
- Compliance Requirements: Adherence to international conventions like HKC and Basel, alongside national regulations, is essential.
- Avoiding Sanctions Violations: Shipowners must develop strategies to recycle vessels without breaching sanctions, potentially by investing in compliant facilities.
- Combatting Illegal Practices: Authorities need stricter enforcement against reflagging and unregulated recycling.
Ship recycling is no longer a peripheral issue but a central pillar in the maritime industry’s sustainability goals. Stricter regulations and heightened environmental awareness compel stakeholders to embrace sustainable practices.
While the shift presents challenges, it also offers a significant opportunity to innovate and lead the transition toward a greener, safer maritime industry. Through collaboration, transparency, and adherence to evolving legal frameworks, the industry can transform ship recycling into a model for environmental responsibility and economic efficiency.
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Source: HILL DICKINSON
