Dry bulk industry association Intercargo is warning there will not be enough approved shipyards to scrap a fleet of bulkers flagged in the Europe larger than panamax size when the regional ship recycling regulation (SRR) kicks in next year.
The SRR allows the demolition of ships flagged in Europe at European Commission-approved yards, comprising 23 European facilities, two Turkish yards and one in the US.
According to Intercargo, 1,098 bulkers have been demolished since 2015, but only 26 were torched outside Bangladesh, India or Pakistan.
Turkey torchings
The 26 that were not scrapped in the Indian subcontinent were demolished in Turkey and only four — one capesize and three panamaxes — were bulkers longer than 200 metres.
Intercargo secretary general Kostas Gkonis said the figures show there is a “significant lack of appropriate technical specifications and capacity at European shiprecycling facilities in accommodating large bulk carriers”.
As a result, he warned that the SRR will put the Europe flag at a competitive disadvantage and it will become less attractive to the dry bulk industry.
However, the EC is confident that suitable capacity will be available to break up not only the bulkers, but ships of all types.
'Sufficient potential'
European Commissioner Karmenu Vella, in response to a recent letter from the European Community Shipowners’ Association expressing concerns about capacity in Europe, said there was “sufficient potential” in the approved yards to demolish all ship types.
The EC’s figures show the yearly average weight of all EU-flagged vessels scrapped between 2013 and 2017 was 588,000 ldt, while the historical capacity of the approved yards is 614,000 ldt with a theoretical maximum capacity to 1.72 million ldt.
The availability of capacity to demolish ships above panamax size would be boosted if the applications of Indian yards were to be approved by the EC.
So far, 13 Indian yards have applied to be approved under the European SRR. Four Chinese yards have also applied, even though the country has imposed a ban on the import of foreign-flag ships for demolition.
However, only two Indian yards have been inspected and experts say the approval process is unlikely to be finalised before next year.
