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How ship recycling rules are going to cost

Shipping is setting itself new goals to once again make further improvements to the industry through better ship recycling regulations, which are already starting to make an impact on the industry and could cost $5bn, writes Samantha Fisk.

The IMO’s Hong Kong Convention on Ship Recycling has slowly been gaining momentum over time, but there is still more that needs to be done with further countries that need to ratify the convention to actually bring it in to force. The countries that still need to ratify the convention such as India, Bangladesh, Turkey and Pakistan are holding back, yet these are the places that most of the ship recycling takes place.

“It is difficult for these countries to dispose of hazardous materials because there are currently no appropriate disposal facilities – the infrastructure is not yet fit for purpose”, explained Yuvraj Thakur, Commercial Director, Verifavia, “And there are many lobbyists in each country who do not want to have to adhere to these regulations as they fear the impact this could have on the local economy. Whether this is morally acceptable or not, it is the prevailing reality.”

Despite the reluctance, some, such as recycling consultant Jim Heath, at UK- based consultancy Marprof believes ratification of the Convention could happen soon, “Both India and China are thought to be close to ratifying.  Although China has stopped accepting foreign ships for recycling, its historical record will still be counted,” he said.

Marprof and French-Class Society Bureau Veritas have teamed up to offer combined services to recycling facilities the tools to meet the requirements of the convention and the similar European regulations.

added that it is imperative that the industry incorporates lessons learned from other recycling projects gone before.

“There have been many successful recycling projects.  There is much excellent guidance freely available.  All the lessons and all the tools exist and are in use,” he said. “It is a simple matter of choice whether to act in the full spirit of the Hong Kong Convention and its guidance and take active responsibility for the ship recycling, or to ignore the lessons of the past”, Heath notes.

Many of the class societies, such as Bureau Veritas, which are active in verification and certification under the Convention take a more ‘cradle to grave’ approach to ship recycling and provide owners tools to help through the whole life of a vessel, from newbuilding to recycling. When it comes to hazardous substances it can provide sampling for these materials and prepare inventories which can then be accessed through most digital platforms.

If hazardous materials are found on a ship, shipowners need to be quick to react to this and to be in compliance with the International Hazardous Materials (IHM) requirements. The EU Ship Recycling Regulations (EU SRR) prohibits or restricts the installation and use of hazardous materials (like asbestos or ozone-depleting substances) on board ships, as well as making it mandatory for ships to carry on board a certified IHM specifying the location and approximate quantities of those materials.

From 31 December 2018, this applied to new EU-flagged ships and EU-flagged ships going for dismantling, and from 31 December 2020 it will affect all existing EU-flagged ships, as well as ships flying the flag of a third country and calling at an EU port or anchorage.

However, this is a challenge for shipowners: “One key challenge for the shipowner or operator is the requirement to maintain the IHM during the lifetime of the ship. Every time new equipment, machinery or materials are delivered onboard, this must be properly recorded. Legal documents from the manufacturers (Material Declaration form) and suppliers (Supplier Document of Conformity form) must be collected and the IHM report has to be updated accordingly”, comments Verifavia’s Thakur.

Thakur said the importance of this document is that when a ship comes to its end of life and when it is dismantled, the ship recycler has a document that he understands before touching a particular segment of a vessel.

Heath explained that developments in new technologies coming on to the market can also assist with ship recycling for the future. “The biggest challenge is control of the inter tidal zone.  If technology can either stop spills in this area, or rapidly control them, then this would greatly assist traditional beach recycling methods.  In reality this is very difficult.”

Currently the IHM requirements look set to have a far-reaching impact with potentially 35,000 vessels that will be affected by the requirements. These vessels will not just be affected by cost, but also time of getting the right qualified people to carry out they survey’s needed, as Thakur explains: “There is a financial cost of approximately $12- $15,000 per vessel, which includes both cost of the survey and the class society certification. This means that the approximate cost for the industry for the 35,000 vessels affected by the regulations is around $5bn ”

“While there are no associated dry dock costs at the survey stage, it takes approximately 10-12 hours for the hazmat expert to complete the required tasks”, he adds.

Targeting the correct market to get the wanted results is key, but in this instance, it is both the shipowner and the ship recycler that have equal parts to play in making sure that ships are recycled in the best and safest way possible. “Both have a major role to play in what should be a partnership.  The owner provides the list of hazardous materials and agrees the ship specific recycling plan with the recycling facility”, Heath concludes.

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