International Ship Recycling Association (ISRA) concerning the impact of COVID-19 on the capacity of the European List of ship recycling facilities:
July 24, 2020 – The International Ship Recycling Association (ISRA) concludes that the present capacity of the European List of ship recycling facilities is sufficient to deal with the increased supply of (EU-flagged)- ships to be recycled. Shipowners will find ample capacity to the EU List, which will be extended in due time. A resurgence of COVID-19 could lead to a further reduction of economic activity, which possibly will affect the number of ships to be recycled.
“The outbreak of COVID-19 has a tremendous global impact including the maritime industry. Nevertheless, the capacity of the European List of ship recycling facilities is still sufficient to satisfy the rising supply of end-of-life ships that will be recycled”.
- It is well known that COVID-19 has an enormous impact on the economies worldwide. IMF’s recent publications and other reports show a steep fall in the world economic activity. Predictions regarding the short-term economic developments are very uncertain and pessimistic: an immediate recovery in foreseeable time is not likely to happen. It is therefore important to keep in mind that this is a one-in-a-lifetime event and that systems that are in place to regulate day-to-day human activities may not be (and rightfully so) designed to address such a black swan event (e.g. the health/hospital system around the world).
- Shipping contributes substantially to economic growth. Also a sector, amongst others, that is significantly affected by the decreasing worldwide economic activities. In the case of COVID-19, a sudden and unprecedented disruption of shipping activities has caused some ship-owners to prematurely decide to end the economic life of their vessel(s).
- International Ship Recycling Association (ISRA) promotes the sound and safe recycling of ships. It is an association acting on a global level. Ship recycling facilities which are members of ISRA operate in alignment with its high standards preventing the adverse impact of ship recycling on the environment and safety of the workers.
- EU List of ship recycling facilities. ISRA welcomed the entry into force of the EU Ship Recycling Regulation (EU-SRR) in 2019, recognizing that with this Regulation high standards are ensured. Besides this, EU-SRR also enables the European Commission (EC) to approve ship recycling facilities, that are outside the European Union (EU). Ship-owners with vessels that fly an EU flag are required to recycle their ships only at an EU List approved ship recycling facility.
- Capacity of facilities in the EU List: no shortage with the present supply of EU-flagged ships to be recycled, the capacity of the EU List is at this moment capable to handle the current flow, though there are regional differences. Turkey’s EU-listed facilities are using their full capacity to accommodate the increased ship-owner’s supply. Other EU-listed facilities have sufficient unused capacity (also for larger vessels). The general picture still shows overcapacity on ship recycling facilities on the EU List.
It cannot however be excluded that this capacity may be utilized at a certain moment if the current abnormal level of the supply of end of life ships to be recycled continues until the end of the year due to a possible second wave /resurgence of COVID19, leading to further global economic stain. However, such a scenario should not be considered as a failure of the EU-SRR but rather as one of many logical side effects of such a unique global situation that is negatively affecting so many aspects of everyone’s private and business life.