The Demo Problem

Shipowners are increasingly subject to an array of regulations relating to the operation of vessels. The talk at the moment is of the new low sulphur fuel regulations coming into effect next year. However, the whole issue of scrapping ships has become subject to increased regulation as highlighted here in one of our earlier blogs.

Against this background, a new EU regulation came into effect on 31 December 2018 and will affect all ship owners operating large commercial vessels under the flag of any EU member state. Such vessels must now be scrapped (recycled) at an approved facility. As matters stand, there are few EU facilities on the list and the three yards in the UK will cease to be EU facilities if the UK exits the EU in March 2019. That leaves non EU states who must apply to be included on the list of approved facilities. There are currently a couple of yards in Turkey and the USA on that list and more may follow but it’s a laborious process and the costs of recycling are generally higher than in India or Pakistan. All in all, this regulation is likely to dissuade owners from registering their vessels under EU flag states.

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