The shipping industry wants low-cost ship ‘breaking’ yards outside the EU – with dangerous working conditions and poor environmental standards – to be added to the EU list of approved facilities in order to meet demand from vessels bound by the bloc’s ship recycling law, which enters force on 1st January, 2019.
But the current EU list can accommodate the numbers and sizes of EU-flagged ships that are scrapped every year, the new report by NGOs Shipbreaking Platform and Transport & Environment (T&E) claimed.
The 20 EU yards currently recognised as meeting ship-recycling standards have the capacity to handle all EU ships broken since 2015, the report said. Shipbreaking Platform and T&E said lawmakers should not succumb to pressure to either delay the implementation of the regulation or add sub-standard shipbreaking facilities – which would never be allowed to operate in EU countries – to the list.
Yards that use the beaching method are of particular concern. Vessels are full of hazardous materials, including asbestos, chlorine compounds, heavy metals and residue oils. On a tidal mudflat it is not possible to contain these toxics – instead they are washed out to the sea, and ravage coastal ecosystems.
Without proper protective equipment, workers are also exposed to unnecessary risk. Accidents at the beaching yards kill or maim young men each year, due to unsafe practices, they said.
Ingvild Jenssen, Shipbreaking Platform director, said: “The shipowners’ capacity claims are a clear red herring. Alternatives to beaching end-of-life ships exist. It boils down to not accepting the low occupational safety and environmental protection standards that allow many unapproved yards to operate cheaply.”
Shipowners misleadingly cite the EU yards’ historical capacity to claim that they are over-capacity. However, this does not take into account the EU facilities operating under capacity, due to being undercut by sub-standard competition overseas. It also ignores the capacity of newly-opened yards.
Lucy Gilliam, shipping officer at T&E, said: “The business of breaking EU ships is an opportunity to boost circular economy and create green jobs in Europe. EU-listed yards have the capacity to break all EU-flagged ships and more. There is no excuse for sending ships to dangerous and polluting yards on beaches overseas”.
The European Commission, national experts and stakeholders will meet on 3rd October to discuss the implementation of the regulation.
Meanwhile in the current demolition market, following some of the extraordinarily speculative sales recently, which saw several tankers (including VLCCs) concluded at numbers that are completely disconnected from present day sub-continent realities, the speculative theme continued last week, with further wild cash buyer moves, GMS reported.
Bangladeshi steel plate prices bounced back by $20 per LDT, whilst Indian plate prices fell about $12 per tonne overall, adding to the ongoing currency woes that has affected the Rupee. Some of the prices reported for various vessels were far ahead of where markets were at.
As speculated recently, this could be down to certain cash buyers looking to put their new/recent access to funding to work and they were seeking to secure large LDT vessels at whatever cost, in order to park that money.
Certainly, overall demand in the sub-continent markets was ripe with an extremely muted summer having just passed – particularly in India and Pakistan, where local port reports remained starved of tonnage, compared with a recently rampant Bangladesh.
Moreover, most of the tankers beached in Pakistan, since the market's reopening back in April, have yet to commence cutting and this would explain a lack of local arrivals over the summer months, with very few dry vessels currently on offer.
Bangladesh also saw five VLCCs arrive over the last few tides, as the total number sold this year creeps towards 40 and with the ongoing L/C problems being faced, there are very few open and capable end buyers in Chittagong left to take on much more of the large LDT tonnage that continues to be introduced into the market.
Finally, as China languished ‘in absentia’, Turkey continued to firm, as local offerings made a small jump last week, GMS concluded.
Brokers reported that Pakistan interests had taken the 2000-built VLCC ‘New Discovery’ for $450 per ldt on the basis of ‘as is’ Khor Fakkan, while Bangladeshi buyers had purchased NAT’s 1996-built Suezmax ‘Nordic Voyager’ for $437 per ldt.