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2025 February 27   12:20

EU blames shipowners for undermining Ship Recycling Rules via reflagging

The European Commission released an evaluation of the EU Ship Recycling Regulation (SRR), in place since 2018, on February 25, highlighting its success in supporting global standards like the Hong Kong Convention, effective June 2025.

However, the assessment, submitted to the European Parliament, identifies European shipowners as significantly undermining the regulation’s effectiveness by reflagging ships to non-EU flags or selling them to cash buyers who reflag, often shortly before recycling, to avoid EU requirements.

The SRR mandates EU-flagged ships to recycle at facilities on the European List, comprising 41 approved yards, 34 in EU member states and Norway, six in Turkey, and one in the U.S., with a total annual capacity of 2.85 million light displacement tonnes (LDT).

Despite achieving higher environmental and social standards, the regulation faces challenges, with shipowners incentivized by higher revenues—up to €3 million per vessel—from selling end-of-life ships to South Asian yards, where scrap steel prices exceed EU rates, as noted in the evaluation.

“European shipowners’ practice of reflagging ships or selling to cash buyers before recycling considerably undermines the SRR’s objectives, prompting consideration of further measures,” the European Commission stated in its report.

The evaluation, preceding the Hong Kong Convention’s June 2025 implementation, finds that 84% of 328 EU-owned or flagged vessels dismantled in 2016 were beached in South Asia, with Germany and Greece leading at 97 and 104 vessels, respectively.

Reflagging, often costing a few thousand euros, allows owners to bypass EU rules, with inventories of hazardous materials (IHM) frequently absent or insufficient during a vessel’s operational life, compromising recycling safety, as highlighted in the February 18 Commission report.

In 2024, 512 EU-flagged ships were dismantled, with 78% sent to South Asia, per the NGO Shipbreaking Platform, up from 71% in 2023, reflecting persistent challenges despite a 12% rise in EU yard capacity to 3.1 million LDT.

European Commission is the executive branch of the European Union, headquartered in Brussels, responsible for proposing legislation, implementing policies, and enforcing regulations, including the EU Ship Recycling Regulation since 2018. 

News 2025 February 27

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