It took a while, but the ship recycling convention comes into force in 2025. Now ship recyclers have to up their game, but so do policy makers still as Basel Convention and Europe's own regulations make life complicated for any shipowner wanting to scrap a vessel
Bangladesh and Libera have become signatories of the Hong Kong Convention on Ship Recycling and the IMO has said the convention will now come into force in 2 years. So what happens now?
For shipowners with end of life tonnage the convention being in force could have profound impacts depending largely on where the vessel is flagged, what it’s last port of call is, how the conflicting interpretations and links between the convention, the EU ship recycling rules and the Basel Convention continue to be interpreted.
This last point is the trickier one as lobby groups use it to prevent some vessels being sent to the beaches of Asia.
At the 11th hour: Why Bangladesh needed to ratify now
The process to build a new convention to tackle the conditions where ships are recycled or scrapped began in 2006.
It took three years for the text to be written and agreed and now, 2023, some 14 years after those texts agreed, the requirements for it to come into force are met. So in 2025 it comes into force, nearly 20 year, and yet the work is far from done.
There’s two reasons for the length of time it has taken to come into force. The requirements for recycling countries are exact, and the requirements for coming into force (tonnage percentages) are so closely interlinked and bound by time scales that have proven to be problematic.
The Hong Kong Convention came into force now that 15 states have acceded to it (agreed to put the convention into national regulations). To come into force it also needed those signatories to represent 40% or more of global gross tonnage. This is why it was important that countries like Panama and Liberia have acceded.
The final requirement was that the countries that recycle ships and are signatories need to have a capacity of 3% or more of the gross tonnage of the combined tonnage of the flag state signatories.
And that was about to become a big problem according to experts like recycling policy expert Nikos Mikelis.
Mikelis worked at the IMO and was heavily involved in writing the IMO Hong Kong Convention text and subsequently has followed the policy developments around ship recycling closely.
The potential problem, he said in a call for the Aronnax Podcast, was that the percentages in the convention text are taken on a rolling ten year period, so the last 10 years for Bangladesh span from 2012 to 2021, as the 2022 data has not yet been delivered.
2012 was one of the big years for recycling nations, including Bangladesh, as it was when tonnage scrapping levels were particularly high due to the economic difficulties at the time, and good second hand steel prices.
Had the IMO got the 2022 recycling and fleet statistics, before these recent two ratification announcements, then Bangladesh’s recycling capacity would not include this bumper year, and be significantly lower, while at the same time the fleet size has grown by 86% since the convention was agreed, and recycling capacity by less than half that.
In short if two flag states (Liberia and Marshall Islands, for example) had signed up to the convention before Bangladesh ratified it (Marshal Islands has also been rumoured to be about to accede) or if the 2022 data had been made available, then it would have been almost impossible for the Hong Kong Convention to have ever met the requirements to come into force.
However, the work to encourage Bangladesh to ratify in time, thanks efforts such as the Norway funded, IMO led, Sensrec (Safe and Environmentally Sound Ship Recycling in Bangladesh) project, has been successful in getting the nation over the finish line in time.
While the ratification of the convention is an 11th hour move, and a welcome step for many ship owners, there are now some key policy problems needing resolution to make it easy for some owners to send their ships to be scrapped at the recycling lots in Asia.
The problem with policy
There still remains an entangled policy mess that ties the IMO’s convention with three other pieces of legislation.
According to Mikelis, Brussels has six months to look at how it will respond to the Hong Kong Convention coming into force in two years time, as this opens the door for recycling facilities in Asia to be on the European list of approved yards.
He points to article 30.2 of the European rules which states:
“The Commission shall review this Regulation not later than 18 months prior to the date of entry into force of the Hong Kong Convention and at the same time, submit, if appropriate, any appropriate legislative proposals to that effect. This review shall consider the inclusion of ship recycling facilities authorised under the Hong Kong Convention in the European List in order to avoid duplication of work and administrative burden.”
He then points to the Basel Convention ban amendment and the European waste shipment regulations which can, and have been used successfully, by lobby groups that are opposed to the recycling of ships on the beaches in Asia.
These ban exports of waste materials from OECD countries to non-OECD countries, with ships being considered waste.
Therefore, in an even deeper policy twist, the IMO Hong Kong Convention and the Basel Convention have been taken to the Vienna convention to try and see if the IMO convention has precedence and equivalence to Basel and can therefore permit the export of ships as waste material to India and Bangladesh.