Fathom-news asks industry experts their opinions on different maritime matters. This week, we asked ‘what will the ship recycling landscape look like in 2018?’
Ingvild Jenssen, Director and Founder of the NGO Shipbreaking Platform
Financial incentives are needed to strengthen the enforcement of the EU Ship Recycling Regulation as it will mean it will be the responsibility of the flag state to enforce the law. This is expected to result in the increased use of grey and black listed flags to avoid the law.
The new EU ship recycling list will be the first of its kind to be government backed. A list of ship recycling facilities that comply with the high standards for safety and environmental protection and that are subject to independent certification and auditing. It is expected to provide more visibility to the ship recycling yards that have already invested in safe and environmentally sound practices. Shipowners will, however, be able to continue selling their vessels to cash buyers – middle men that specialize in trafficking end-of-life ships to the South Asian beaches. This is why we call on the EU to adopt a financial incentive that affects all vessels trading with the EU.
A depressed freight market has led to shipowners being spooked and selling more tankers for demolition than previously. More tankers have been sold for demolition this year already than 2016 as a whole, and these ships are at a younger average age than previously. Looming regulations are causing and likely to cause further demolitions as shipowners have to install expensive environmental equipment like ballast water management systems or marine scrubbers. The costs of these are often more than the value that the ship is worth and so many owners are and will continue to opt to scrap ships instead.