The Commission launched a study report which assesses financial instruments to facilitate safe and sound ship recycling. Regulation (EU) No 1257/2013, also referred to as the Ship Recycling Regulation
(SRR), entered into force on 30 December 2013. To address concerns over its efficacy, as the Regulation only requires sound recycling for EU flagged ships, a criterion that can easily be circumvented through timely re-flagging to a non-EU flag, the possibility for the European Commission to create a financial incentive is provided in Article 29 of the SRR, stating that the Commission shall report before the end of 2016 on “the feasibility of a financial instrument that would facilitate safe and sound ship recycling”.
To be effective, a proposed financial instrument must be capable of inducing a change in behaviour on the part of ship owners towards the recycling of their ships in compliance with the SRR. Various options have been considered for such a financial instrument in previous studies, but an earlier proposal based on these to the European Parliament was rejected.
This study proposes an alternative financial incentive instrument based on the introduction of a Ship Recycling Licence required for the entry to EU ports, connected with fees that serve capital accumulation with the aim to cover the revenue gap between sound and unsound recycling.