Norwegian insurer Gard has stated that its protection and indemnity cover will pay the additional costs of green recycling in the case of wreck removal.
Gard’s statement comes after the Norwegian Hull Club launched a new product called Sustainable Recycling Interest, which it said is intended to cover the cost of green recycling in addition to standard protection and indemnity cover.
The Norwegian Hull Club said the policy was launched in response to demand from its members, who wanted certainty that their vessels would be recycled responsibly when declared a constructive total loss.
But Gard said green recycling is already an “integral part of our P&I cover”. The insurer pointed to the case of the 4,900-ceu Hoegh Xaimen (built 2012), in which it paid for demolition at an European Union-approved yard in Turkey. It also covered demolition of the 4,293-dwt bulker Kaami (built 1994) at the Kishorn dry dock in Scotland.
Andreas Brachel, head of environmental claims, said Gard will pay to recycle EU-flagged vessels only at EU-approved yards. And it covers scrapping of non-EU-flagged vessels only at yards that are compliant with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
“When evaluating yards available for the job, we will put emphasis on whether the yards are making efforts to operate sustainably over and above the standard set by the Hong Kong Convention,” Brachel said.
”In other words, sustainability is one of the key factors when deciding which yard will be the successful bidder. This will encourage yards which are not on the list of EU-approved yards to go the extra mile.”
