The European Parliament's Environment Committee on Wednesday voted against a European Commission proposal to add two ship recycling yards in Alang-Sosiya, Gujarat, India—Shree Ram Vessel Scrap and YSI Recyclers—to the EU List of approved facilities. The objection passed 48 votes to 26, with five abstentions. It was the first time Indian facilities had been proposed for inclusion.
At the center of the dispute is the beaching method, in which vessels are driven onto tidal shorelines for dismantling. Opponents argue that cutting ships apart in intertidal areas makes it difficult to contain oil, heavy metals and other hazardous materials, even at facilities that have invested in improved infrastructure and environmental controls. They also raised concerns about downstream waste management, including scrap steel sent to local re-rolling mills not assessed against EU industrial emissions standards.
Shipping associations have taken the opposite view. BIMCO, the European Community Shipowners' Associations (ECSA), the International Chamber of Shipping and others have argued that approval should be based on individual facilities' compliance rather than location or method. They warn that the EU List faces a shortage of suitable recycling capacity as more vessels approach the end of their operating lives. According to shipping associations, more than 95% of global ship recycling takes place in Bangladesh, India, Pakistan and Turkey.
For Chinese freight forwarders and shippers on US and Europe lanes, the decision has no immediate impact on rates or capacity, but tighter recycling capacity could slow the retirement of older vessels and indirectly affect the pace of capacity supply. The current EU List contains 41 facilities: 30 in Europe, 10 in Turkey and one in the United States. The European Commission has acknowledged weaknesses in the system, including shipowners reflagging vessels outside the EU shortly before recycling to avoid the regulation's requirements.