Breaking Out News Series – Unlocking Brazil’s potential in ship recycling

We are excited to launch our Breaking Out News Series, in anticipation of the second edition of our Ship Recycling Lab in Lisbon this October. Highlighting innovators who believe in competitive, responsible practices, we challenge damaging methods of ship dismantling on tidal beaches and advocate for safer, cleaner and smarter alternatives.

 

Our first post focuses on why Brazil is poised to become a significant player in the global ship recycling market. With its extensive coastline and robust maritime industry, many existing facilities, primarily engaged in shipbuilding and repair, have the potential to expand into recycling.

 

Professor Newton Pereira of Universidade Federal Fluminense (UFF) tells us that Brazil is likely to become an important destination for ship owners looking for the sustainable disposal of their assets. From already existing large infrastructure in the States of Rio de Janeiro, Rio Grande do Sul and Pernambuco to strict national regulations on hazardous waste management, from a soon to be approved national bill mirroring the European Union Ship Recycling Regulation to the shift in policy of the countries oil and gas company Petrobras and the scrapping of Petrobras’ P-32 and P-33 in Brazil, the country stands on the cusp of radical transformation.

 

UFF plays a is crucial role in this transformation through its Center for Sustainable Systems Studies (CESS/UFF), which focuses on hazardous waste management, optimisation of recycling methods and the scrap steel market to ensure Brazil has a qualified workforce, innovation and resources needed to support its own solutions for ship recycling.

"At CESS, we are developing RFID (Radio Frequency Identification) and NFC (Near Field Communication) technologies to manage hazardous waste on ships and in shipyards. Our goal is to ensure transparency and traceability in materials disposal. Specifically, we are exploring ways to automate the management of IHMs (Inventory of Hazardous Materials) on merchant vessels, offshore platforms, and abandoned ships scheduled for decommissioning, dismantling, and recycling. We are currently testing smart labels placed throughout vessels, which can be read remotely within seconds using unmanned vehicles. Additionally, we are working on a project looking at ways to destroy the hazardous characteristics of for example asbestos and glass wool by transforming them into marketable products such as glass."
Newton Pereira - Professor - Universidade Federal Fluminense
Prof. Newton Pereira with his team - © UFF

According to recent figures, dozens of fixed and floating oil and gas platforms and more than 300 large commercial ships regularly operating in Brazilian waters will be retired in the next decade. Brazil’s potential in ship recycling will be further explored by several experts, including Petrobras’ representatives and Professor Pereira, at the upcoming Ship Recycling Lab in Lisbon.

"The Lab is the perfect opportunity to discuss and present alternatives to dirty and dangerous shipbreaking. The concept of an ethical circular economy, which is the connecting thread of the event, represents the cornerstone for a cleaner industry aligned with the sustainable development goals proposed by the United Nations. I am looking forward to highlighting Brazil's initiatives and capabilities in this forum and potentially forge new collaborations."
Newton Pereira - Professor - Universidade Federal Fluminense

Press Release – Container shipping asked to clean up its act in view of upcoming scrapping wave


Triggered by overcapacity, lower freight rates and the new carbon regulations expected this year, numerous container ships will be sold for scrapping in the near future. In light of this foreseeable surge in the number of discarded box ships, the NGO Shipbreaking Platform has reached out to the largest companies of the sector demanding change in corporate policies and practices by encouraging the pursuit of sustainable solutions.

 

Several container shipping companies have already been in the spotlight due to the poor management of their end-of-life vessels. NGOs and Danish media revealed the hypocrisy of Maersk when they decided in 2016 to U-turn on their recycling policy and head for the Indian beaches. The profits made by Swiss giant MSC on the back of exploited workers and coastal environments also caused public outcry, and, in 2018, Scandinavian pension funds, including the Norwegian Government Pension Fund Global, divested from Taiwanese container line Evergreen due to the breach of international human rights and the severe environmental damage caused by the beaching of their vessels.

 

Ships contain many hazardous substances and materials that may negatively affect people and the environment. Hence, it is crucial that their dismantling is carried out in an environmentally sound and safe manner at a recycling destination that can safeguard workers’ health and protect local communities and ecosystems from pollution. Progressive companies and recycling businesses are looking at the EU Ship Recycling Regulation as the only responsible standard regulating this industry. South Asian beaching yards fail to comply with this standard, and more recently two Turkish facilities were removed from the EU List of approved ship recycling facilities.

 

With increasing focus on sustainability and due diligence, including pressure from investors and clients, many container lines need to revise their ship recycling practices and policies. Beaching is by far the worst industrial practice, as is the practice of down-cycling and re-rolling contaminated scrap steel. Options that operate with standards on safety, circularity and material recovery in line with international labour and environmental law and ESG expectations already exist. With the projected growth in demand for capacity to recycle large vessels, the NGOs call on the box ship sector to show leadership and support the scaling of truly sustainable ship recycling solutions.

 

Press Release – Turning point: new tech and developments for a new future of ship recycling presented at the Lab

Stakeholders that are pioneering a new future for sustainable ship recycling gathered in Rotterdam at the NGO Shipbreaking Platform’s Ship Recycling Lab: Transformation through Innovation. New technologies, ethical circular economy models, strategic policies for the steel industry, and many more topics linked to ship demolition, ship design, waste management and material recovery were discussed during the two-day event. 

"We aimed at boosting engagement for a new standard at the Ship Recycling Lab. Companies that can safely dismantle large assets ‘off the beach’ and use technologies ranging from automation and robotics to the age-old, tried and true use of dry docks came in numbers. Coupled with the growing market for sustainably produced scrap steel, it has become clear that the business case for truly responsible ship recycling is rising."
Ingvild Jenssen - Executive Director & Founder - NGO Shipbreaking Platform

 

The current industrial and political shift to a circular and low-carbon economy has brought ship recycling to a turning point. Participants at the Lab showcased how they are seizing new opportunities for innovation created by the momentum for green and regenerative design, production and end-of-life management.  

 

Circular Maritime Technologies International BV (CMT) chose the Lab to share its new cutting technology, which is transferable to any facility and reduces the vessel's size in several automated steps. 

 

Founders of Leviathan GmbH, Simeon Hiertz and Karsten Schumacher, announced at the Lab their cooperation with German Naval Yards on facilitating clean and safe ship recycling in Kiel. The technology developed by Leviathan, which includes the use of robots and cold water cutting techniques, will be available to owners of large vessels in a dry dock of 426x88m.

"Now our vision of automated, people- and environmentally-friendly ship recycling is becoming a reality. At the same time, we are securing important steel as a raw material for European steel production, assisting European steelmakers to reduce their carbon footprint."
Simeon Hiertz - Founder - Leviathan GmbH

 

Head of Climate Change and Governmental Affairs at ArcelorMittal Europe, Stephane Tondo, also speaking at the Lab, stated that the green transition will require the decarbonisation of steel production. According to EuRIC, using one tonne of sustainably produced scrap saves at least 1.67 tonnes of CO2. Increasing the share of scrap in steel production and ensuring proximity to raw materials are key strategies to ensure decarbonisation, said ArcelorMittal. The latter revealed its cooperation with CMT for the possible development of a new ship recycling facility in Gent, Belgium, close to its steel plant. Noting that the European Union (EU) will soon become a net importer of scrap, ArcelorMittal is now looking for additional partnerships with recyclers close to its other steel plants in the EU in order to ensure access to good quality scrap steel from vessels. 

 

"There are many reasons to be optimistic and to bet on the innovators that spoke at the Lab. They are convinced that responsible ship recycling can compete, especially given that integrated circular economy hubs, where building, maintenance, repair and material recovery take place side by side, are in view."
Ingvild Jenssen - Executive Director & Founder - NGO Shipbreaking Platform

For those who want to learn about the new developments that will shape the future of the industry and the forward-thinkers that spoke at the Lab, the NGO Shipbreaking Platform has published the new magazine Breaking Out: Anchoring Circular Innovation for Ship Recycling. This first edition of Breaking Out cuts across sectors with an eye on the latest technologies and policies aimed at reinventing ship recycling for the twenty-first century.

"Green investors will find lots of inspiring projects in Breaking Out. We also encourage ship owners that unfortunately did not make it to the Lab in great numbers to read the magazine. It is a solutions-oriented publication providing insights on what responsible recycling means via in-depth articles, interviews and spotlight profiles. It showcases very concrete new destinations for their end-of-life assets."
Ingvild Jenssen - Executive Director & Founder - NGO Shipbreaking Platform

Platform News – REMINDER: Ship Recycling Lab on 20-21 September in Rotterdam

It’s almost time! We hope your calendars are marked because the Ship Recycling Lab is about to take place in the shipping hub of Rotterdam.

 

On the 20th and 21st of September, forward-thinking stakeholders from the maritime, recycling and steel sectors, financial institutions, and policymakers will gather at the iconic Kunsthal Museum, where they will showcase and exchange ideas for best practices and strategies for ship demolition, design, waste management and material recovery in line with ethical circular policy goals.

 

The event will provide visibility to companies that have developed solutions, including innovative cutting techniques, new state-of-the-art waste handling procedures, cradle-to-cradle concept design, and clean steel breakthrough technologies aimed at achieving a zero-carbon steel-making process. Curious and want to learn more? Check out the list of speakers and the online agenda here.

 

What are the impacts of unregulated shipbreaking practices on workers and the environment? What does it mean to sustainably recycle vessels in line with ethical circularity? What impacts will the increased demand for scrap steel have on the ship recycling market? How can new innovative technologies and economic and policy instruments drive an ethical circular economy?

 

We try to answer these questions in conversation with leading advocates for environmental justice, ship owners, steel producers, policy makers, researchers, shipbuilders, ship recycling experts, and many more.

 

Don’t waste any time. Register and buy your tickets now at www.shiprecyclinglab.org. Come join us! 

Any questions? Contact us at events@shipbreakingplatform.org.
 

We encourage you to join the discussions on Twitter using the hashtag #SRLab. You can also follow the event organisers @ShipRecLab and @NGOShipbreaking.

 

Platform News – SAVE THE DATE: Ship Recycling Lab on 20-21 September in Rotterdam

Recognising the need for visionary solutions for ship recycling, we are hosting our first Ship Recycling Lab: Transformation through Innovation on 20-21 September 2022 in Rotterdam, Netherlands.

 

The event will bring together forward-thinking stakeholders from the maritime, recycling and steel sectors, financial institutions and policy makers to showcase and exchange ideas for best practices and strategies for ship demolition, design, waste management and material recovery in line with ethical circular policy goals.

 

Providing visibility to companies that have developed solutions, including innovative cutting techniques, new state-of-the-art waste handling procedures, cradle to cradle concept design, and clean steel breakthrough technologies aimed at achieving a zero-carbon steel making process, the Lab intends to set the bar for tomorrow’s ship recycling. 

 

Come join us and 200+ progressive stakeholders for networking opportunities, inspiring keynote speaker sessions, thought-provoking presentations, interactive panel discussions, a photo exhibition from Bangladesh and a live performance at the iconic Kunsthal museum in the shipping hub of Rotterdam in September!

 

Register and buy your tickets now at www.shiprecyclinglab.org to get a €200 Early Bird Discount. 

Any questions? Contact us at events@shipbreakingplatform.org.
 

We encourage you to join the discussions on Twitter using the hashtag #SRLab. You can also follow the event organisers @ShipRecLab and @NGOShipbreaking.

 

Platform News – Norwegian pension funds turn their attention towards Indian shipbreaking practices

Last week the Council on Ethics of the Norwegian oil pension fund (Government Pension Fund Global) announced that it will turn its attention towards Indian shipbreaking practices. This may well result in further divestments from shipping companies with poor shipbreaking records. 

 

ivest from companies, including container line Evergreen, selling their end-of-life vessels to shipbreaking yards located in Pakistan and Bangladesh due to an unacceptable risk that the companies are contributing to serious environmental damage and gross violations of human rights”. 

 

KLP, Norway’s largest private pension fund, followed suit and blacklisted the same companies. In January, KLP also blacklisted Nordic American Tankers (NAT) following the sale of ten oil tankers for dirty and dangerous scrapping on beaching yards in South Asia. The Bermuda-registered company, controlled from Norway by Herbjørn Hanson, was firstly confronted by KLP and criticised by Norwegian press for having sold eight ships for scrapping to South Asia in 2018, ensuring NAT a 80 million dollar scrapping revenue. Five vessels ended up in Chittagong, Bangladesh; three ended up in Alang, India. The sale of two additional vessels to Bangladeshi yards with terrible accident records prompted KLP to blacklist NAT earlier this year.

"KLP’s goal is that no ship ends up on a beach where irresponsible scrapping practices take place. It is the ship owners’ responsibility to identify which standards, routines and processes they need to comply with to ensure safe and responsible ship recycling."
Håvard Gulbrandsen - CEO - KLP

The European Commission recently announced that two Indian yards (i.e. Priya Blue Industries Pvt. Ltd, Shree Ram Vessel Scrap Pvt. Ltd) that applied for inclusion in the European List of ship recycling facilities do not comply with the EU Ship Recycling Regulation. The site inspections and technical assessments, done by the classification society DNV GL, identified several areas where the yards do not meet the requirements for clean and safe ship recycling.  

 

 

Financers pressure shipping industry to clean up its recycling practices

Financers pressure shipping industry to clean up its recycling practices

Banks, pension funds and other financial institutions are increasingly asked to take into account social, environmental and governance criteria when selecting asset values or clients. Investing with an eye to environmental or social issues, not just financial returns, is in demand, and the credit providers and investors of shipping are now actively taking a closer look at how they might contribute to a shift towards better ship recycling practices off the beach.  

 

Through what is known as “negative screening”, investors are using the annual lists that the Platform publishes on global dumpers to screen their portfolio. In 2018, Scandinavian pension funds the Norwegian Government Pension Fund Global and KLP divested from four shipping companies due to their beaching practices. The exclusions were made public and with written explanations. Both the breach of international human rights and the severe environmental damage caused by beaching were highlighted as reasons for the divestments.

 

"One particular problem with beaching is that shipbreaking takes place when the vessels are standing in mud and sand. As a result, the pollution leaches into the ground and is washed out with the tides. Even if arrangements were put in place at the beaching sites for the treatment of asbestos and PCBs, for example, the fundamental problem of containing and collecting the pollution would be impossible to resolve. There are better ways of dismantling ships that are readily available to the shipowner, but these are more expensive. "
Council on Ethics - Norwegian Government Pension Fund Global

 

Banks play a crucial role in supporting economic activity through their lending. They can also influence better business practices through engaging with their clients on social, environmental and governance matters. Starting off as a Dutch bank initiative with NIBC, ING and ABN AMRO as founding members, large Scandinavian and German shipping banks are now also part of a group of banks that promote responsible ship recycling and negotiate clauses to that aim in the loan agreements they sign with shipping companies. 

 

"The recycling, or scrapping, of a ship at the end of its lifecycle poses potential large social and environmental risks for the shipping industry, especially if so-called beaching practices are used. These practices mean that ships are driven directly upon beaches and dismantled under difficult working conditions and with detrimental environmental consequences as hazardous waste is discharged directly into the sea."
Nordea Bank

 

The financers of shipping have signaled that there are likely further exclusions to come. In light of the announced decommissioning in the oil and gas sector, it is further likely that investments in oil and gas assets will be also scrutinized. 

 

 

 

Council on Ethics - Recommendation to exclude Evergreen Marine Corp (Taiwan) Ltd from the Government Pension Fund Global (GPFG)

KLP - Shipbreaking practices in India, Bangladesh and Pakistan

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Platform News – Norway’s largest Pension Fund highlights human rights and environmental risks related to shipbreaking in South Asia

KLP, Norway’s largest pension fund [1], commissioned the International Law and Policy Institute (ILPI) [2] to write a report on the human rights and environmental risks related to the current practice of dismantling end-of-life ships on intertidal beaches. The report entitled Shipbreaking practices in Bangladesh, India and Pakistan. An investor perspective on the human rights and environmental impacts of beaching was released last week and examines the shipbreaking practices in Bangladesh, India and Pakistan in light of internationally recognised frameworks for responsible business conduct, as well as the practice of the Council on Ethics for the Norwegian Governmental Pension Fund.

 

The report argues that the responsibility of companies operating in the global market place does not stop at its own doorstep, but extends to adverse human rights impacts in the entire value chain. KLP joins a number of other investors and clients of shipping [3] that increasingly raise concerns over the current conditions of the shipbreaking industry in South Asia.

"The dismantling of ships using the ‘beaching’ method as it is practiced on the beaches of South Asia is dangerous for people and the environment."
Jeanett Bergan - Head of responsible investment - KLP

International standards by which corporate responsibility can be measured include the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles for Business and Human Rights (UNGP). Companies are required to carry out a risk-based due diligence with respect to the human rights as well as environmental impact of their business activities, including their value chain.

 

In the report’s foreword, CEO of KLP, Håvard Gulbrandsen, states: “We hope that the report can help raise awareness of the severe human and environmental risks beaching can entail for shipping industry companies, their customers, and also for other investors. […] KLP hopes to encourage investors to work together to engage with companies on improving labour and environmental conditions. The shipping industry is and will be an important part of Norwegian investors' portfolios for the foreseeable future. KLP's goal is to work towards a future where responsible shipbreaking is the industry standard.”

 

 

NOTES

 

[1] KLP is Norway's largest life insurance company. Kommunal Landspensjonskasse (KLP) delivers financial and insurance services to the public sector, enterprises associated with the public sector and their employees.

 

[2] International Law and Policy Institute (ILPI) is an independent institute focusing on good governance, peace and conflict, and international law. Their approach to solving global challenges is based on the integration of law and social sciences and on bridging the gap between academia and politics. They provide research, analysis, policy advice, process support and training to clients ranging from private companies and institutions to governments and international organisations.

 

[3] Major companies such as H&M, Tetra Laval, ABB, Philips, Volvo and Volkswagen do not want to be associated with substandard shipbreaking practices in South Asia and have asked their forwarders – the shipping companies they use to transport their goods – to adopt sustainable ship recycling policies. For more information click here.