The EU Commission has launched a proposal to EU member states to add two Indian ship recycling facilities to its list of approved yards. If approved, this would mark the first time that Indian yards have been recognised under the EU Ship Recycling Regulation (EU SRR), representing a milestone for a region that recycles the majority of the world's end-of-life ships. We welcome the proposal as a positive step towards a more objective and performance-based approach to ship recycling.
The proposed inclusion of the yards reflects the substantial investments made by leading Indian recycling facilities over the past decade. Today, more than 110 Indian recycling yards hold a Hong Kong Convention (HKC) Statement of Compliance, issued by International Association of Classification Societies members. In addition, 23 yards in Bangladesh have already been authorised to conduct ship recycling by their national authorities as per HKC requirements.
We believe that all yards, such as those in Alang, India, which have invested heavily in infrastructure, undergone repeated audits and received an official Document for the Authorisation of ship Recycling (DASR) from their national competent authorities, should be eligible to recycle ships. We therefore fully support the proposal by the EU Commission while recognising that the proposal should only be considered as a first step towards further global acceptance of the Hong Kong Convention.
According to an estimate from our analysts, over 16,000 ships could be recycled over the next decade. While ship recycling holds great potential for the circular economy, it must be done in a safe and environmentally sound manner, and we need shipowners to choose globally compliant yards.
Nearly a decade after the first Indian yards applied for inclusion on the EU list, it is fair to question whether a regional unilateral approach presents enough opportunities for building confidence, attract long-term investment and support continuous improvement in a sector that urgently needs it. The EU Ship Recycling Regulation still offers limited legal clarity on when and why facilities outside the EU are added to, or removed from, the EU List. Much of that decision still relies on non-binding guidance while, on the contrary, EU facilities are not subject to the same level of external assessment. We believe this approach does not offer a strong foundation for predictability, fairness or global progress.
While additional capacity to the EU list is welcome, the industry will continue to require significantly more approved recycling capacity to meet the future demand. We therefore encourage European regulators to continue recognising compliant facilities, regardless of location, and to work towards greater convergence with the Hong Kong International Convention.
Finally, it must be noted that the proposal must complete the EU approval process, including scrutiny by member states and the European Parliament. While the Commission's technical assessment supports the inclusion of the two facilities, differing political views from the EU parliament may emerge regarding the interpretation and application of the EU Ship Recycling Regulation, potentially influencing the final outcome.
It is our hope that the decision will remain firmly grounded in the Commission's technical findings and the objective criteria established under the regulation.
