The European Ship Recycling Regulation (SRR) that came into force at the end of last year requires that all large vessels sailing under the flag of a European Union member state be recycled at one of its 26 approved shipbreakers' yards, which are mainly within the EU.
Although three yards in India — Shree Ram Vessel Scrap, Priya Blue Industries and JRD Industries — have applied to join the EU’s list of approved yards, they have yet to be sanctioned by the European Commission, which is tasked with certifying yards outside of the EU.
Shree Ram and Priya Blue were audited last year, while JRD Industries is still awaiting its first assessment.
Industry sources, including the shipbreakers themselves, indicate that the EC’s main concerns over the audits of the first two yards lie in what happens outside of the upgraded shiprecycling facilities, rather than inside.
The EC is worried about sustainable downstream handling of hazardous waste that is not dealt with by local waste treatment facilities.
It is also concerned about the absence of a suitable hospital in Alang that would be capable of providing adequate medical care for workers in the event of serious injury.
Peter Koller, policy officer at the EC’s waste management and recycling unit, says the door is still open to Indian shipbreakers. He told delegates at the TradeWinds Ship Recycling Forum held in Hong Kong during March that the EC had not rejected the yards' applications and the process was ongoing.
This means that for now EU-flagged ships cannot be recycled at Alang, or any other yard in South Asia.
Priya Blue director Guarav Mehta is confident about eventually gaining EC approval, but says the yard's current exclusion from the EU's approved list of breakers has had little impact on its day-to-day business.
“I don’t really see this as a problem for now. EU-flagged fleet are generally newer. Most owners tend to sell them for further trading.
"It is very rare for an EU-flagged ship to be sold for recycling. We haven’t seen one in our yard for the past three years,” he says.
PHP Shipbreaking and Recycling managing director Mohammed Zahirul Islam is also unfazed.
“Few EU-flagged ships have been sold to Bangladesh in the past. We have seen the number of ships arriving in Chittagong increase over the past three months, even with the ban in place,” he says.
Few EU-flagged ships have been sold to Bangladesh in the past. We have seen the number of ships arriving in Chittagong increase over the past three months, even with the ban in place
Mohammed Zahirul Islam
Although the absence of EU-flagged ships has had little financial impact on South Asian shiprecyclers, they believe it is still important to be included on the list.
“I think in the future [some] owners will ask for EU SRR. They are mainly going to be European, but it may also be the case from large corporations such as oil majors, even though they are not governed by EU rules,” Mehta says.
Other shiprecyclers agree there can be no turning back.
“Applying EU regulations in India is a good thing. If yards at Alang can obtain EU approval, it will give shipowners the trust that India has upgraded its standards and is capable of recycling their ships in a sustainable way.
"At the end of the day, we need to preserve the environment,” says Raza Meghani, director of Rai Metal Works.
Meghani indicates that Rai, while certified as compliant with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships by RINA, wants to receive similar approval from ClassNK before looking at becoming EU compliant.
JRD Industries' Sanjiv Agarwal suggests that once EU-approved yards in India begin to receive EU-flagged ships, it will encourage other shiprecyclers at Alang to upgrade, which he claims will be a big of benefit to sustainable shipping.
“Indian yards have shown that they can upgrade to EU standards. We have shown a remarkable ability to not only recycle the steel, but also reuse almost everything else found onboard a ship.
"The shipping world has a tremendous opportunity in India to make a tangible and positive impact on the environment.”
It remains to be seen when the EC will be satisfied with the improvements at Alang.
Shiprecyclers there suggest that they have done their part by improving their yards and now it is up to the national and state authorities to do their part by upgrading the medical and downstream waste facilities under their control.