With the entry into force of the Hongkong Convention this coming June, shipowners and IMO Member States worldwide will be confronted with an unprecedented need to disentangle the murky legal web of the global ship recycling regulatory framework. This was the position that shipowners were trying to relay to both EU and international policymakers at the event co-organised by the Royal Belgian Shipowners’ Association (KBRV) at yesterday’s European Shipping Summit.

Opening the event was the keynote delivered by Karmenu Vella, former EU Commissioner for Environment, who set the scene with a poignant statement:

“Global compliance builds consistent implementation. Global alignment is crucial to strengthening global standards. But if non-alignment persists, compliance becomes fragmented. Safety and environmental standards then become compromised rather than improved. Regulatory conflicts will only lead to uncertainty and benefit non-compliant yards.”

His speech was followed by a fireside chat with Harald Fotland, CEO of Odfjell SE and Chairperson of the Norwegian Shipowners’ Association (NSA), and David Loosley, CEO and Secretary General of BIMCO, facilitated by Christine Korme, Director Strategic Profiling and Networking at the NSA.

On the basis of a recent study conducted by BIMCO, Mr Loosley rang the alarm bell. Fifteen thousand commercial ships, not including fishing and inland shipping vessels, will be due for recycling each year. With the current backlog resulting from geopolitics and regulatory uncertainty, the numbers are set to increase. To this end, the number of compliant yards either under the Hongkong Convention or the EU’s Ship Recycling Regulation (SRR) will need to shore up dramatically to meet those needs. Yet, compliance cannot be easily achieved as it is not just about infrastructure, but also about training and upskilling.

From his perspective, Mr Fotland highlights the additional urgency confronted by shipowners regarding the legal uncertainty posed by the HKC, the SRR and the Basel Convention together. “When is ship considered waste and who considers it? What are the consequences when the ship is considered waste? The risk of being incriminated is high because no one knows how to interpret the rules.”

Should the HKC be updated as claimed by the EU? “Let’s first get it successfully implemented before we tackle that question,” answered Mr Loosley.

In the panel discussion that followed, different perspectives were put forward on how to resolve the forthcoming legal conundrum.

Susan Wingfield, Programme Management Officer at the United Nations Environment Programme (UNEP)acknowledged the need for clarity in the Basel Convention, but a process needs to be put in place to provide the international forum for all parties involved to air their concerns, including those of the shipping industry.

The need for further deliberation was echoed by Christelle Rousseau, Policy Officer at the DG Environment of the European Commission, who said it is vital for the European Commission to witness a collaborative process between the HKC and Basel, before deciding on what to do with the SRR. Critically, she confirmed that the EU will not revise the SRR due to the potential of the HKC to work as a global standard. But it will need to assess how the HKC will effectively enforce the standard of ship recycling in an environmentally sound way.

Johan Verlinden, Policy Adviser at the Public Waste Agency of Flanders (OVAM) of Belgium added that compliance is difficult to achieve by individual yards because the downstream conditions such medical facilities need to be put in place by the local authorities. More efforts need to be made by the recycling states in order to meet the needs of the 15,000 ships to be recycled.

Evangelia Pouili, Assistant Registrar of Merchant shipping from the Government of Malta, reminds the audience that the coexistence of these different regulations does not only create legal uncertainty but also impose a huge financial burden on the industry. The limitation of the EU list of compliant yards, despite achieving some growth, will not resolve the urgent issue at hand. More importantly, the price gap between EU-approved yards and the HKC-compliant yards sets the EU flags at a competitive disadvantage. Something which EU policymakers need to be fully aware of.

“What is apparent from the debate is that the global maritime community needs to urgently arrive at a higher level of clarity before June,” said Wilfried Lemmens, KBRV Managing Director.