Global trade and commerce are massively facilitated by the ‘Shipping Sector’ since ancient ages. as it is cheaper and economical, contributing to nearly 95% of global commercial goods transport. As a major share of the current trade is facilitated by shipping, any disruption affects the international supply chains. The most recent prolonged interruption is the global COVID19 pandemic which has crippled the industry. It is reported that all types of maritime vessels except the tankers have incurred significant immediate losses. Another recent unforeseen interruption to the global shipping industry was the blockage in the Suez canal by a container vessel which affected a lot of stakeholders in trade and commerce amidst the pandemic.
A major industry intricately linked with the shipping sector is the ship recycling industry. The sustainability of the ship recycling industry is strongly linked with the global shipping market and international commodity flows. More than 80% of the End-of-Life (EoL) ships are dismantled in South Asian countries, namely Bangladesh, India, and Pakistan. In India, the Union Finance Minister Nirmala Sitharaman in the Union Budget 2021-22 praised the ship recycling industry and explained its potential to be doubled by 2024 and the need to attract more EoL vessels to India. China used to be a major player in the industry until the ban was imposed on foreign-flagged ships to be recycled on the mainland. Since 2018, there has been an increasing call in the shipping community to allow the work to resume in China and currently, plans are being made to reverse the two-year-old decision.
Ships are sent for recycling when : (a) the cost of operation and maintenance of the ship exceeds the revenue that it generates during its operational period, (b) are deemed unfit for operations or exceeds its designed lifetime and, (c) the market conditions in the maritime industry generates less profit for the vessel owner to operate. The present pandemic may increase the number of idle vessels which will land as "obsolete" as the market operations are deeply affected and global business has suffered failures.
The recycling industry is also now increasingly affected by the pandemic : (a) due to COVID related restrictions and market difficulties, (b) lack of adequate labour force to dismantle the increased EoL vessels due to lockdowns and health regulations and (c) disturbances of vessel transportation to the recycling nations due to strong precautionary measures.
“Ship recycling” is a bunch of activities that involve recycling/reuse of ferrous/non-ferrous metals and other materials derived from the process of recycling or dismantling obsolete ships. The recycling process consists of a wide array of actions, commencing from inspection followed by removing all the equipment and machinery left on a ship and closure of activity by selling the scrap items recovered from the vessel. The shipbreaking value chain consists of ship-owners, brokers, cash buyers, government machinery, financial institutions, recyclers and waste management companies.
India accounts for about 47 % of the ships dismantled in the World (mainly in Alang, Gujarat) and also supports 10 – 15 % of India’s steel production through recycling of re-rolled sheet metal from recycling activities. The other major materials recovered in the recycling activity include furniture, machinery, office stationery, fuel oil to name a few. Besides recyclables and reusables, a range of hazardous chemicals and substances including asbestos, glass wool, thermocol, oily rags, oily sludge, oily sand, are generated which are usually treated and disposed of in a dedicated Treatment, Storage and Disposal Facility (TSDF). All these sustainable practices of recycling are obliged to comply with Hong Kong Convention (HKC)- 2009 and European Union Ship Recycling Regulation (EUSRR)-2013.
For green dismantling practices, the ship recycling sector maintains excellent documentation which is also maintained up-to-date. The documents like an inventory of hazardous materials [IHM] as per MEPC.269(68) and material declaration by the master of the vessel (during operational life) supports waste management as well as material recovery. The recycling documentation also involves a dismantling plan referred to as Ship Recycling Plan (SRP) as per IMO MEPC 196(62) and is prepared taking into account IHM and by evaluating the adequacy of the Ship Recycling Facility Plan (SRFP) [as per IMO MEPC 210(63)] in the ground. Frequent reporting on the recycling process along with documents like the “Statement of Completion of Recycling” certificate helps in the documentation of resource flows and economics of the operations. The following diagram illustrates the circular economy and waste flow aspects of ship recycling operations.
The ship recycling industry has been practising aspects of a circular economy for several years converting waste to energy, waste to employment and waste to wealth. The concepts of frugality and circularity are automatically embedded in this sector with a great role of formal and informal actors. Ship recycling is an inevitable activity and this sector closes the loop and enhances the life cycle of materials and put them back to economic gain. Many companies like Maersk Line are exploring strategies aligned with the circular economy. This includes ideas like developing a Cradle to Cradle Passport which will comprise an online database of a detailed inventory that can be used to identify and recycle the components to a higher quality. The emphasis is also placed on materials choice and product design which will enable more planning and design as well as EoL management. Extended Producer Responsibility (EPR) of the ship recycling is also an essential component of circularity. By extending responsibility, shipowners are hoped to fulfil their moral duty by proactively taking environmental considerations into account while design, planning and building and operations phases go till the EoL phase of their vessels. It would be ideal if the producers take back the recycled materials like steel, maritime equipment, machinery etc., as it helps the maritime industry’s efforts to reduce its carbon footprint by reducing emissions associated with the production of materials from virgin resources.
While ensuring material and resource efficiency, the ship recycling sector also needs to become resilient. Many of the South Asian recycling nations suffer from economic losses and loss of employment opportunities due to pandemic and lockdowns. A study by Rahman et al., (2021) points out “ten parameters” to understand the impact of COVID-19 or any disruption in the recycling process. The parameters in the discussion include: "Low scrap price, Local scrap demand, Ship operating costs, Severity of disruption, Trust, Prior business experience, EoL ship transportation barriers, Labor supply, Vessel characteristics, and Role of financial institutions". These ten parameters can be classified into disruption events, business relations, and market response categories. It is essential to consider these parameters to ensure smooth operation of the recycling operations.
It is also crucial that the recycling process while providing livelihood to thousands of workers, should also ensure adequate health and safety to workers and protection of the environment. The present pandemic situation provides a rare opportunity to reshuffle our ‘business as usual mode of production/ operation, supply, and consumption. This will enable the transformation to a more sustainable life embedded in social values while embracing a circular economy.
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