HKC specialist information

Modern requirements for ship recycling are imposed by the countries in which ships are built, the countries under whose flags the ships sail, port states, and countries where ships can be recycled. The global regulations governing shipbuilding and recycling are very complex and are constantly evolving.

The aim of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is to ensure that all materials and substances used in shipbuilding are almost completely recycled. Today, for example, almost every material in ships, from steel to batteries, can be recycled. Of course, the conditions for this still vary greatly from country to country – from fully equipped recycling workshops to scrapping on sandbanks, there are a wide variety of “solutions” for ship disposal around the world today. The majority of the ship recycling industry is located in Bangladesh, India, and Pakistan.

However, many shipyards around the world still fall far short of the labor, safety, and environmental standards that are desirable for safe ship recycling and that are being demanded by more and more people worldwide. Only the HKC, which has now come into force, can be expected to improve the global situation in ship recycling.

The fact that ship recycling is often simply referred to as “scrapping” shows how little the concepts of environmental protection and circular economy have found their way into the consciousness and respective national legislation to date. There will literally be many shipwrecks to salvage in the coming decades.

• The introduction of a register for hazardous substances, an “Inventory of Hazardous Materials” (IHM). This list of pollutants includes toxic substances such as PCBs, asbestos, and various ingredients in ship paints that contain TBT.
• An IHM certificate, which must be renewed every five years, known as the International Certificate on Inventory of Hazardous Materials (ICIHM), for which the respective flag state of the ship is responsible.
• A Ship Recycling Facility Plan (SRFP), which covers the management of occupational health and safety, environmental protection, and other safety measures in ship recycling facilities.
• An operating permit: the “Document of Authorization to conduct Ship Recycling” (DASR), which is issued by the state authorized for recycling for a maximum period of five years.
• The “Ship Recycling Plan” (SRP): a plan for the dismantling of ships in a suitable facility, which also takes into account the SRFP and the IHM.
• A certificate attesting to readiness for recycling: the International Ready for Recycling Certificate (IRRC), which is based on the IHM and the SRP.

The EU introduced its own legislation for ship recycling, Regulation (EU) No 1257/2013 (EU Ship Recycling Regulation). It came into force at the end of 2013 and has been fully binding since the end of 2020. However, this “European Regulation on Ship Recycling” only applies to ships flying the flag of EU member states.

Since the beginning of 2015, ships flying the flag of EU member states may only be disposed of by shipyards that are listed in the EU list of so-called SFRs, or “Ship Recycling Facilities.” Today, ships over 500 gigatons, as well as newly built ships, must also be scrapped with a certified IHM, i.e., an Inventory of Hazardous Materials. Since the beginning of 2021, ships flying the EU flag and those entering EU ports must carry a certified IHM.

It is quite possible that EU regulations for ship recycling will be further tightened. For example, there is a proposal circulating for incentives for ship recycling to prevent owners from registering under the flags of countries that have lower standards or no standards at all for environmental protection and occupational safety during scrapping. It is quite possible that, sooner or later, EU ports will introduce cost contributions for ship recycling licenses, which will only be refunded to those who pay them if the ships are scrapped in an EU-approved facility (“recycling facility”).

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The provisions of the EU Ship Recycling Regulation (EU SRR) are considered the most exemplary in the world, ahead of the Hong Kong Convention and the Basel Convention. However, there are still many loopholes in the EU SRR for unscrupulous and environmentally harmful companies, which, for example, often simply sail under the flags of countries that set lower or no standards for ship recycling. Nevertheless, the EU Ship Recycling Regulation, adopted in November 2013, is considered the world’s most stringent set of rules for protecting the environment and health in ship recycling. The requirements apply to ships flying the EU flag and those calling at ports in the EU, as well as to recycling facilities and ship owners. The provisions of the EU SRR are similar to those of the HKC, but go beyond them. For example, the EU Ship Recycling Regulation prohibits certain substances that are still permitted under the HKC, such as the flame retardant HBCDD and perfluorooctane sulfonic acid (PFOS).

The purposes of the EU SRR are:

• “the prevention, reduction, minimization, and, as far as practicable, elimination of accidents, injuries, and other adverse effects of ship recycling on human health and the environment”
• “to improve safety, the protection of human health, and the marine environment of the Union throughout the life cycle of a ship, in particular to ensure that hazardous waste generated during ship recycling is treated in an environmentally sound manner.”

The European Ship Recycling Regulation (EU SRR) stipulates that commercial ships over 500 GT sailing under a European flag must be recycled in facilities that are compatible with workers’ rights and the environment. These are listed in a regularly updated list of approved ship recycling facilities. The recycling facilities listed here must meet various environmental and safety requirements. The EU SRR also goes beyond the Hong Kong Convention in that it prohibits, for example, the so-called beaching method. This involves deliberately maneuvering ships onto sandy beaches, where they run aground and are dismantled into their component parts, often using child labor. This is usually done without adequate occupational health and safety or environmental protection measures, and with all the dangerous and harmful substances that are released into the environment in the process. The EU SRR also sets higher requirements than the HKC with regard to toxic waste disposal and workers’ rights. Unlike the HKC, recycling facilities for ships under the EU SRR are also inspected and certified by independent bodies (see the list of “Recycling Facilities” linked above). The EU SRR also stipulates that all ships operating in EU ports or anchorages must carry an inventory of hazardous materials (IHM).

Since January 2021, the European Ship Recycling Regulation has also been mandatory for existing ships calling at EU ports.

The EU also has the Waste Shipment Regulation (Regulation (EC) No. 1013/2006 of the European Parliament and of the Council of June 14, 2006, on shipments of waste). It implements the Basel Convention, which in turn regulates the control of transboundary movements of hazardous waste and its disposal in the EU. According to the Basel Convention and an amendment from 1995, exports of hazardous waste to countries that are not members of the Organization for Economic Cooperation and Development (OECD) are prohibited. According to the Waste Shipment Regulation, all ships intended for scrapping are hazardous waste if they fly the flag of an EU member state. They may only be scrapped in OECD countries. Ships covered by the EU SRR are exempt from the Waste Shipment Regulation. However, the regulation continues to apply to ships flying non-EU flags that are sold to the EU for scrapping.

According to the EU SRR, hazardous substances are defined as any materials or substances that may be dangerous to the human environment or health. Various materials and hazardous substances are used on ships that can be harmful to human health and the environment. Asbestos, for example, is used particularly frequently because it is used for fire protection in engine rooms, for example. If such asbestos-containing components are damaged, extremely harmful fibers can be released. Heavy metals such as mercury or lead from batteries, paints, and varnishes are also common in shipbuilding.

According to Chapter 2 (5) of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and Article 5 of the EU SRR, an Inventory of Hazardous Materials (IHM) is mandatory for every ship flying the flag of the International Maritime Organization (IMO) or the EU. This must be carried or stored on board the ship and contains the location and quantity of hazardous materials used.

The IHM must be officially verified and is also referred to as a “green passport.” It must be updated throughout the ship’s entire life cycle, from construction to scrapping, and ideally ends up at the recycling shipyard together with all material data.

For existing ships that fall under the EU SRR, the IHM is already mandatory. For ships covered by the HKC, there is a five-year transition period from the date of entry into force to submit an IHM. Ship owners should start preparing the IHM early, as it can take a long time to identify and list all hazardous substances. It is important to proceed with particular care and diligence. We are happy to support you in this process with our services!

It is much easier for new ships to create an IHM. This obligation rests with the respective shipyard that builds the ship. However, supplier companies must submit a Supplier’s Declaration of Conformity (SDoC) and a Material Declaration (MD).

In addition to the International Certificate on Inventory of Hazardous Materials, also known as the “IHM Certificate,” the International Certificate on Recycling Readiness for Ships, or “International Ready for Recycling Certificate (IRRC),” is also important. If these two certificates are not available, the ship will be subject to closer scrutiny based on the guidelines of the International Maritime Organization (IMO). The IRRC is issued after the ship owners have submitted the IHM to a facility listed in the European List of Ship Recycling Facilities. This facility is then responsible for drawing up a Ship Recycling Plan (SRP). The IHM Certificate and the IRRC are issued after an on-board inspection and are valid for a maximum of five years.