Environment - BIMCO Bulletin

Environment

ENVIRONMENT March 2021 EU can boost Asias recycling yard upgrade if inclined Maersk By Mette Kronholm Frnde, Communications Manager and Editor at BIMCO Around 80 per cent of all ships that are recycled are recycled in Asia Today, the Indian sub-continent accounts for around 80% of the worlds ship recycling activity. Despite this, not a single Asian yard figures on the list of approved recycling yards for ships flying a European Union flag. As the EU lacks the capability and capacity to recycle larger ships, and will be unable to meet demand for recycling in the future, A.P. Moller-Maersk has taken matters into its own hands. A little over five years ago, A.P. Moller-Maersk made the decision to develop its own responsible recycling standard and headed to Alang in India to find yards that had the potential to be upgraded to meet the groups recycling requirements. The reason was and still is that the lack of Asian yards on the European Unions (EU) list of approved facilities will pose major challenges in the future. According to Simon C Bergulf, the groups Director of Regulatory Affairs, the number of ships heading for recycling over the coming years is certain to rise. One reason for this is that increasingly stringent CO2 emission regulations such as those imposed by the International Maritime Organization (IMO) and the EU are coming into place. These rules, aimed at decarbonising the industry, will result in the need to renew the existing fleet. Bergulf believes neither international nor regional regulations are currently being applied or interpreted to meet this expected rise in demand for recycling. Either we all put on blindfolds and focus on our own backyard in Europe, which will not solve the problem at all, or we do a reality check and realise that around 80 per cent of all ships that are recycled are recycled in Asia, and therefore, this is where our focus really needs to be, he says. We believe it is very important to start focusing on the countries where the ships are actually being recycled, so the quality of these recycling yards can be improved to levels on a par with EU requirements. We are already seeing that happening. The Alang potential Yards in India, Pakistan and Bangladesh are the primary destinations for ship recycling in Asia. The quality of these varies greatly, but a significant number have voluntarily invested to comply with the Hong Kong Convention (HKC) and a few leading players continue to upgrade further to meet the EU Ship Recycling Regulation (EUSRR) standards. More than five years ago, Maersk began its programme to upgrade recycling yards in India, starting by setting the groups own recycling standard that yards must live up to. The standard is more stringent than either the HKC or the EUSRR, according to Bergulf. During the process, Maersk researched which yards had the potential to live up to the standard, while also ensuring the plan made commercial sense and was viable from a business perspective in the long term. We decided years ago to look into the Alang area, because this was where a lot of the ships are being recycled and we believed at the time and still believe today that there was the possibility to lift that whole area to higher standards of recycling, says Bergulf. So, since 2017, we have responsibly recycled nine ships in Alang and have carried out 30 external audits to ensure that standards lived up to our requirements throughout the process. We also made sure a local Maersk representative was onsite throughout the process and had the full power to stop the work at the yard if needed. To date, Maersk has conducted around 3,100 training sessions for the Alang workers involved in the recycling process to make sure they understand the health and safety aspects of the work. As a result, no fatalities or major injuries occurred during the recycling of the nine ships; neither has there been any hazardous spills in the intertidal zone. In addition, the group has helped build a dormitory for more than 1,200 people, compliant with International Labour Organization standards, to upgrade living conditions for the yard workers. Free pass for EU yards EU auditors have been to Alang, and other areas and countries outside the EU, to audit a number of yards. So far, no Asian facilities have made it onto the EU-approved list. According to the EU regulation, any yard can apply for addition to its list. There is, however, a big difference in the way that it is applied, as yards inside the EU do not need to be audited to be added to the list, which is a little strange. The yards are allowed to come onto the list if the member state chooses to put them on the list, without any obligation for external auditing, Bergulf says. For yards outside the EU, on the other hand, an external auditing process is needed. We risk losing a very strong momentum in raising the bar for ship recycling The Alang yards audited so far have received detailed feedback pointing out what needs to be addressed in order for them to make it onto the EU list. At the end of last year, around two yards were given the green light in terms of everything that was going on in the yard. However, there were still questions regarding downstream waste management and hospital facilities that were not deemed adequate. The yards themselves have actually made it, meeting the standards of the EU ship recycling regulation. That is very positive, as these investments seem to be paying off, Bergulf says. A major problem in the process is that not everyone is given a fair chance to get on the EU list, Bergulf believes, adding that without a level playing field, the Asian yards can improve, but will still never make it to the list. This can be solved by Europe, not in Europe We believe we have helped secure quite a strong momentum in Alang and helped raise the bar significantly, says Bergulf. If it ends up in empty promises to those yard owners who have invested heavily in making their yards compliant, we risk losing a very strong momentum in raising the bar for ship recycling in India. And that is hugely problematic. He believes the need to facilitate the development of more sustainable ship recycling practices across the globe is urgent and that it is time to make a real difference and respond to market needs with commercially viable alternatives. Overall, a sustainable solution for EUSRR-compliant recycling must come from non-OECD countries where inherent steel-demand with minimal last-mile costs leads to higher steel-scrap prices, Bergulf says, as these countries are better placed to make sure ship recycling truly is embedded in a local circular economy. Photo (top): courtesy of A.P. Moller-Maersk This can be solved by Europe, not in Europe, he says. Connect with BIMCO Facebook Twitter Linkedin YouTube