Ship Recycling

Ship recycling is the most environmentally sound way to dispose of ships at the end of their commercial lives and contributes to the circular economy through the supply of scrap steel to the steel producing industries, thereby reducing both the need for raw materials such as iron ore and the overall CO2 emissions from the production of new steel.

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (the HKC) will enter into force on 26 June 2025.

In the transitional period shipowners are urged to use HKC compliant facilities. This will encourage more recycling facilities to become HKC compliant and support the business case for compliant ship-recycling yards before the HKC has entered into force.

Regulation (EU) No. 1257/2013 on ship recycling (the EUSRR) was adopted in 2013 and needed to be reviewed by EU Commission services by 26 December 2023, not later than 18 months prior to 26 June 2025. In addition, due to the latest changes to the EU Waste Shipment Regulation (EU WSR) , the export of end-of life ships will be prohibited to any non-OECD States, regardless the flags or the facilities being EU listed or not. These changes follow the entry into force of the Basel ban amendment and the implementation of it into EU law. Two sister ships will have different compliant recycling possibilities depending on whether they are in or outside EU waters and when outside EU waters, whether they call States that are a Party to the Basel Convention (and possibly Basel ban amendment) or not.

Up until today, the EU list does not contain ship recycling facilities which are located in any of the three major recycling States. In addition, the use of theoretical recycling capacity, does not reflect the real capacity available to recycle the commercial EU fleet.

For those reasons, the possible introduction of a Financial Incentive Mechanism would work as a de facto trade impediment and threaten EU port competitiveness. Also, third countries will likely see this kind of favouring of a narrow group of mainly EU ship recycling facilities as a trade distortion, which runs counter to WTO/GATT rules, particularly given the fact that the Hong Kong Convention is entering into force. It remains to be seen if and how the EU COM would propose such a mechanism as part of a revision package. 

Further, the Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (Basel Convention) entered into force in 1992. It is applicable to EU member states through the EU Waste Regulation (Regulation (EC) No. 1013/2006). The Ban Amendment to the Basel Convention (Basel Ban) prohibits all transboundary movement of hazardous waste (including end-of-life ships), which is intended for final disposal and/or recycling, from member countries of the Organisation for Economic Co-operation and Development (OECD) to developing countries. It entered into force in 2019.

For the Basel Convention and the HKC to co-exist, there is an urgent need for the parties to the Basel convention and the parties to the IMO to consider how to best ensure that possible legal uncertainties can be clarified prior to the entry into force of the HKC. BIMCO will engage with intergovernmental organisations, such as the IMO, the United Nations Environment Programme, the Basel Secretariat and EU institutions to highlight the importance of legal clarity. To address the issue, BIMCO will work to put the matter on the agenda of IMO MEPC as well as the Basel Conference of the Parties (COP), which is set to take place mid-2025, just a few weeks before the entry into force of the HKC.

Shipowners are responsible for updating their ships’ IHMs based on suppliers’ documentation in the form of mandatory Material Declarations. As most materials received onboard ships are produced and delivered outside Europe, the development and correct maintenance of the EU - IHM present a challenging requirement for shipowners.