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Document 52012SC0045
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
/* SWD/2012/0045 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT /* SWD/2012/0045 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a
REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on ship recycling 1. Problem definition 1. The Waste Shipment Regulation[1] implements
at European level the requirements of the Basel Convention on the control of
transboundary movements of hazardous wastes and their disposal. It also
implements the provision of an Amendment to the Convention (the so-called ‘Ban
Amendment’) which prohibits the export of hazardous waste outside the OECD.
This Amendment has not yet entered into force at international level due to
insufficient ratification. 2. According to this
legislation, EU-flagged ships going for dismantling constitute hazardous waste
(since they contain hazardous substances) and can only be dismantled within the
OECD. This legislation is almost systematically circumvented. In 2009, more
than 90 % of EU-flagged ships were indeed dismantled outside the OECD,
mostly in South Asia (India, Pakistan and Bangladesh) through the so-called ‘beaching’
method and with significant environmental and health impacts. 3. This widespread
non-compliance is firstly linked with the lack of recycling capacity available
within the OECD in particular for the largest ships. The existing capacity at
European level is used for the dismantling of small ships and governmental
ships which do not come under the scope of the Hong Kong Convention. Similarly
to shipbuilding, ship dismantling has moved during the last few decades from
European countries to non-OECD countries for economic reasons. As a result, the
option of developing additional capacity in Europe has not been economically
feasible. 4. Secondly, the current situation of the ship recycling market is characterised
by fierce and unfair competition between the major recycling states Bangladesh,
India and (to a lesser extent) Pakistan. Other competitors with higher
technical standards are only able to occupy market niches for special types of
ships like small ships and government vessels including warships (EU and
Turkey) or the fleet of committed shipowners (Turkey and China). 5. Finally,
the current legislation is not adapted to the specificities of ships.
Identifying when ships turn into waste is indeed difficult. In order to apply
the current legislation and, in particular, the ban on exporting end of life
ships outside the OECD, Member States would have to make an effort on
enforcement which would be disproportionate and inefficient taking into account
the lack of recycling capacity within the OECD as well as the legal possibility
for any ship to change its flag. 6. The
situation is likely to worsen since large numbers of ships are expected to be
sent for dismantling in the coming years as a result of an overcapacity of the
world fleet which is estimated to remain for at least 5 to 10 years. In
addition, the coming peak in ship recycling around the phasing-out date for
single-hull tankers (2015) is expected to essentially benefit the most
sub-standard facilities. 7. In
order to improve the situation a specific Convention has been developed by the
International Maritime Organization. The Hong Kong International Convention for
the Safe and Environmentally Sound Recycling of Ships was adopted in 2009 but
will need to be ratified by the major flag and recycling states in order to
enter into force and start producing effects. 8. If
the Hong Kong Convention does not enter into force and if the European
legislation is not modified, it is highly probable that the current market
situation will persist. A peak in dismantling activity is bound to lead to a
resurgence of lethal accidents and occupational diseases, as the new staff will
be recruited from among the poorest and usually inexperienced rural labourers. 2. Objectives of the EU
initiative 9. The general objective of developing
a Ship Recycling Regulation is to reduce significantly
and in a sustainable way by 2020 the negative impacts of the recycling of EU-flagged
ships, especially in South Asia, on human health and the environment, without
creating unnecessary economic burdens, by facilitating the entry into force of
the Hong Kong Convention. The specific objectives are
to: SO1: reduce the human health and
environmental impacts by ensuring that EU-flagged ships are dismantled only in
safe and environmentally sound facilities worldwide, SO2: ensure the availability of sufficient
and economically accessible sound and safe recycling capacity to dismantle EU-flagged
ships, SO3: strengthen the incentives to comply
with the European legislation. 3. Policy options 10. The first possible option
(the ‘baseline option’) would consist in keeping the current legislation (Waste
Shipment Regulation) unchanged. Member States would ratify and implement the
Hong Kong Convention in their domestic legislation. They would however continue
to be prohibited from exporting large commercial EU-flagged ships outside the
OECD for recycling even if, in practice, a large proportion of these ships
would continue to be recycled in non-OECD countries. It is not expected that
Member States would significantly improve their enforcement of the legislation
as the implementation of the Ban Amendment would require significant efforts
and would be ineffective (major reflagging to non-EU flags can be expected as a
result of the lack of recycling capacity within the OECD). 11. The second option (B) would
consist of including in the Waste Shipment Regulation some requirements of the
Hong Kong Convention. These requirements would apply to recycling facilities located
in the EU and in the OECD since the dismantling of large commercial EU-flagged
ships outside the OECD would continue to be prohibited. Member States would
ratify and implement this Convention in their domestic legislation. 12. The third option (C) would
consist in excluding the ships covered by the Hong Kong Convention (large
commercial seagoing vessels) from European legislation. These ships would
instead be addressed only by the domestic legislation of Member States possibly
based on the Hong Kong Convention’s regime. 13. A fourth option (D) would
consist in covering the ships under the Hong Kong Convention (large commercial
seagoing vessels) by a new ad-hoc Regulation. This Regulation would cover the
whole life cycle of EU-flagged ships, implement early the requirements of the
Hong Kong Convention and, as allowed by the Convention, include more stringent
environmental criteria for ship recycling facilities. EU Member States would be
informed in writing and in due time of the shipowner’s intention to send a ship
for recycling. This requirement as well as the introduction of sanctions, which
would be at least equivalent to the ones applicable under the current
legislation, will ensure compliance with the legislation. While it is difficult
to expect the current ‘beaching’ facilities to be able to meet these
requirements, it is possible that upgraded facilities might be able to fulfil
these criteria in the future. In order to avoid confusion, overlaps and
administrative burden, ships covered by this new legislation would no longer be
covered by the Waste Shipment Regulation. 14. A final option would
consist in complementing option D with specific elements: (1)
Option E1 would consist in addressing also
government vessels, including navy vessels, in the new Regulation transposing
the Hong Kong Convention, (2)
Option E2 would require EU-flagged ships to be
treated in facilities providing a level of protection of health and of the
environment equivalent to EU facilities, (3)
Finally, option E3 would consist in allowing the
export of EU-flagged ships only to a list of third party audited and certified
facilities. 4. Assessment of impacts 15. As recommended by the
Impact Assessment guidelines, the assessment has focused only on the additional
impacts of the other options compared to the baseline scenario. Quantitative
data are provided in the table below. 16. From an environmental
perspective, the different scenarios will have the same impacts regarding
generation of hazardous and non-hazardous waste as well as on CO2 emissions except
for option E1[2].
The options would however have different impacts regarding the percentage of
hazardous waste which would be managed in an environmentally sound manner.
Options C and E1 have a negative impact, options D and E2 a positive one and option
B the same impact as the baseline scenario. 17. Option B would have similar
social impacts[3]
compared to the baseline scenario. Option C would have negative impacts (higher
social costs) in the medium and the short term. Option E1 would have negative
impacts in the short, medium and long term. Option D would have positive
impacts in the short term only, while option E2 would have significant positive
impacts in the short, medium and long term. 18. From an economic
perspective, the implementation of the Hong Kong Convention will entail
additional costs for shipowners (reduced price offered for their ships by
upgraded recycling facilities and administrative costs) and for Member States
(administrative costs). Options B, D and E2 would anticipate the application of
the Hong Kong Convention compared to the baseline scenario and would therefore entail
additional costs for EU shipowners and Member States in the short and medium
term. They would however have no additional impacts compared with the baseline
scenario from 2025 onwards. In addition, option B would entail additional
administrative costs for Member States regarding control, inspection and
enforcement in the short, medium and long term. Option C would have positive
impacts compared to the baseline scenario for shipowners and Member States in
the short and medium term. Option E1 would have positive impacts in the short,
medium and long term. 19. Option B is expected to
create problems of compliance since it would not resolve the problem of
the lack of legally accessible recycling capacity and would create confusion by
mixing two sets of requirements (from the Basel and Hong Kong Conventions). No
problem of compliance is expected under option C (all facilities would be
legally accessible) nor option E1. Option D would have a positive impact
because the proposed legislation would be adapted to the specificities of ships
and sufficient recycling capacity would be legally accessible at a slightly
reduced price. In addition, specific sanctions will be introduced in order to
address the possible remaining cases of non-compliance. For the same reasons,
option E2 is expected to lead to a higher level of compliance compared with the
baseline option. However, more non-compliance can be expected compared to
option D since the revenues of shipowners would be more negatively affected and
since the available recycling capacity might be reduced as a result of stronger
requirements for facilities. Option E3 would provide a tool for checking that
the facilities to which EU-flagged vessels are sent for recycling comply with
the applicable standards and rules on safe and environmentally sound recycling
of ships. It would however present a lower level of compliance than option D
because of the possible reluctance of third countries due to sovereignty
issues. 20. Several stakeholders have
pointed out that the co-existence of two sets of legal requirements (resulting
from the Basel and Hong Kong Conventions) would be very confusing and
administratively burdensome. Option B would therefore have negative impacts on
the simplification of the existing legislation. Large EU-flagged ships
would no longer be covered by European legislation under option C. This would
have a positive impact on the simplification of legislation in the short term
which might be more limited in the long term if the EU Member States have
diverging national legislation to implement the Hong Kong Convention. Options
D, E2 and E3 would have a positive impact since they would replace the current
legislation by a new instrument better adapted to the specificities of ships. 21. No option is expected to
unduly affect small and medium sized enterprises since the main
businesses concerned (EU shipowners) are rarely small and medium sized
enterprises. 22. The costs linked to the
implementation of the Hong Kong Convention (administrative costs during the
operating life and reduced selling prices at the time of recycling) over the
lifetime of ships are negligible and no impact is therefore expected on consumers
in the baseline and in the other scenarios. 23. In
principle, none of the options envisaged in the impact assessment report has a
direct impact on the EU budget. The quantified additional impacts of the
different scenarios compared to the baseline scenario are summarised in the
table below. Impacts || Environmental || Social || Economic Hazardous waste treated in an ESM manner[4] || Work load EU[5] || Workload (protected workers)5 || Workload (not protected workers) 5 || Workload (not protected child workers) 5 || Fatal accidents (adults) [6] || Non fatal accidents (adults)6 || Fatal accidents (children) 6 || Non fatal accidents (children) 6 || Social costs[7] || Revenues ship owners7 || Administrative costs (Member States) 7 Short term (2015) || B || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || -1 952 011 || 378 604 C || -6 % || -5 || 189 || 468 || 159 || 1 || 184 || 0 || 29 || 969 792 || 12 540 267 || 0 D || 23 % || 0 || 1 423 || -2 246 || -764 || -2 || -473 || -1 || -133 || -3 372 237 || -22 019 545 || 356 430 E2 || 30 % || 0 || -938 || -2 385 || -811 || -4 || -1 105 || -1 || -148 || -5 401 791 || -66 349 943 || 356 430 E3 || 23 % || 0 || 1 423 || -2 246 || -764 || -2 || -473 || -1 || -133 || -3 372 237 || -22 221 755 || 356 430 Medium term (2020) || B || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || -112 036 486 || 640 117 C || -20 % || -6 || -2 497 || 3 244 || 1 103 || 1 103 || 3 || 633 || 1 || 5 993 494 || 31 192 613 || -436 341 D || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || -112 036 486 || 617 943 E2 || 16 % || 0 || -3 778 || 0 || 0 || 0 || -2 || -833 || 0 || -2 820 429 || -189 916 941 || 617 943 E3 || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || -112 266 395 || 617 943 Long term (2025) || B || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 149 062 972 || 22 174 C || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 159 369 991 || -879 612 D || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 149 062 972 || 0 E2 || 16 % || 0 || -3 428 || 0 || 0 || -2 || -756 || 0 || 0 || -3 114 124 || 63 072 738 || 0 E3 || 0 % || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 0 || 148 854 325 || 0 5. Comparison of options 24. The policy packages have
been assessed against the criteria of effectiveness, efficiency and coherence. 25. From an effectiveness point
of view, options D, E2 and E3 would seem the most attractive. Indeed,
they offer the highest potential level of achievement of all specific goals,
while options B and E1 would have globally negative effectiveness and option
C would only have positive effectiveness regarding the Specific Objectives
2 and 3. 26. Option B would
globally have negative efficiency since it would decrease the revenues of
shipowners, increase the administrative costs for EU Member States and would
not solve the current problems of compliance. Option C would also have
negative efficiency: its positive impacts on the revenues of shipowners and on
the administrative costs for EU Member States will be offset by significant
negative environmental and social costs in the short and medium term. Option
E1 would have globally negative effectiveness with positive economic
impacts for EU Member States but negative environmental and social impacts. Options
D and E3 contain effective measures accompanied by limited implementation
and administrative costs, which contributes efficiently to all specific
objectives. Option D2 would have globally positive efficiency. 27. Options D, E2 and E3
would have positive efficiency. However, option E2 would entail very
substantial costs for shipowners which will only be partially offset by the
environmental and health benefits. 28. From an effectiveness point
of view, option D seems the most attractive. Indeed, it offers the
highest potential level of achievement of all specific goals and a higher level
of compliance than option E3. 29. Moreover, as shown by the
analysis of coherence, even if option D presents some trade-offs between
the positive environmental and social impacts and the negative economic
impacts, the trade-offs are lower than for option E2. The loss of
revenues for shipowners under option D (resulting from lower prices offered by
improved facilities) would indeed be offset by gains in terms of environmental
protection and of social impacts. This option addresses all the current
problems and introduces new requirements to ensure compliance before recycling
(obligation to inform the flag state in writing) and after (sanctions if ships
are not dismantled in authorised facilities). It will therefore increase
compliance. In terms of coherence, option D therefore ranks highest. In
view of the above, option D is the recommended option. 30. The table below summarises
the comparison between the options in terms of effectiveness, efficiency and
coherence. Option || B || C || D || E1 || E2 || E3 Effectiveness || || || || || || · SO1 || negative || negative || positive in the short term and neutral in the long term || negative || positive || positive · SO2 || negative || very positive || very positive || neutral || positive || very positive · SO3 || negative || positive || positive || slightly negative || positive || positive Efficiency || negative || negative || very positive || negative || positive || very positive Coherence || no || no || yes with limited trade off || no || yes but with important trade off and risk of non-compliance || yes with limited trade off but with risks of non-compliance Conclusion || || || Recommended option || || || 6. Monitoring and evaluation 31. Given the existing
compliance problems, progress should be monitored to check the implementation
and effectiveness of the EU legislation and its contribution to the objectives.
It is proposed to compare each year the list of ships which were considered as
likely to go for recycling the year before and the list of ships recycled in EU
audited and certified facilities. 32. Indicators of the progress
in this context could be in particular: ·
the number of ship recycling facilities that are
fulfilling the criteria of the Regulation; ·
the number and percentage of EU-flagged ships
dismantled in such facilities compared to the worldwide number and percentage; ·
the state of ratification of the Hong Kong
Convention by the major flag and recycling states; ·
data on the type of employment in ship recycling
facilities (typology of employment, accidents, occupational diseases) as well
as data on the environmental pollution associated with ship recycling, as
available. 33. Taking these indicators
into account, it is necessary to review the EU policy concerning ship recycling
on a regular basis and to submit regular implementation/progress reports to the
European Parliament and the Council. 34. Should compliance problems
continue, further action could be taken at EU level like the setting up of an
EU ship dismantling fund. [1] Regulation (EC) No 1013/2006 of the European
Parliament and of the Council of 14 June 2006 on shipments of waste. [2] Under option E1, governmental ships (including navy
ships) currently recycled within the OECD would be allowed to be sent for
recycling in Asia thus leading to higher CO2 emissions during their final
voyage. [3] Fatal and non-fatal accidents for adult and child
workers. [4] Percentage of waste generated by ship recycling
treated in an environmentally sound manner (ESM) for each option compared to
the baseline option. . [5] Expressed in man years. [6] Number of persons. [7] Expressed in €.