The European Union Ship Recycling Regulation has been effective since 2013 and applies to all ships entering ports and terminals of EU Member States.
While it is consistent with the broad objectives established in the International Maritime Organisation’s Hong Kong Convention (the Hong Kong Convention) on the safe and environmentally sound recycling of ships, the Hong Kong Convention is not yet in force.
The Regulation makes provision for the EU to introduce a financial mechanism, which is intended to encourage the use of ship recycling facilities in the EU, or facilities outside the EU providing they have been EU approved.
The process for approving facilities outside the EU is currently ongoing. In late 2015, consultants appointed by the European Commission proposed several options including an insurance-based solution that could be used to finance a fund which would be established to supportEU recycling.
The proposals were complex and proved to be flawed. The Group engaged in correspondence and discussions with the appointed consultants, explaining that insurance-related options are unworkable and inappropriate in the context of end-of-life ship recycling.
Subsequent to this engagement, the insurance-based proposals have been shelved. Instead, however, it appears that the EU may seek to apply a levy or fund at some later stage.
Discussions are ongoing and the Group will continue to monitor and engage in the European process in the future. (Source: IGP&I)