Commission staff working document - Accompanying document to the Communication from the Commission - Summary Impact Assessment for an EU strategy for better ship dismantling {COM(2008) 767 final} {SEC(2008) 2846}
Date: 2008-11-19
Institutions: European Commission
Subjects: environmental protection, hazardous waste, international standard, maritime safety, occupational safety, public health, shipping policy, vessel, waste recycling

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.11.2008 
SEC(2008) 2847  

COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 
COMMUNICATION FROM THE COMMISSION 

Summary Impact Assessment for an EU strategy for better ship dismantling 

{COM(2008) 767 final} 

{SEC(2008) 2846} 

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COMMISSION STAFF WORKING DOCUMENT 

Accompanying document to the 
COMMUNICATION FROM THE COMMISSION 

Summary Impact Assessment for an EU strategy for better ship dismantling 

This is a summary of the impact assessment (IA) accompanying the Commission proposal for 
an EU strategy on better ship dismantling.  

The  IA  identifies  the  problem  as  a  global  market  failure  in  the  sense  that  the  present  ship 
recycling  market  operates  under  unacceptable  conditions  for  the  environment  and  workers' 
health in South Asia, and that this failure concerns also the EU on account of the high number 
of  European-flagged  and  European-owned  ships  that  go  for  scrapping  to  facilities  in 
Bangladesh, India or Pakistan. 

The  general  objective  of  an  EU  strategy  on  ship  dismantling  is  to  ensure  that  ships  with  a 
strong  link  to  the  EU  in  terms  of  flag  or  ownership  are  dismantled  only  in  safe  and 
environmentally sound facilities worldwide.  This includes as specific objectives: to prevent, 
in  line  with  the  Waste  Shipment  Regulation,  the  export  of  hazardous  end-of-life  ships  from 
the EU to developing countries and to reduce significantly and in a sustainable way by 2015 
the  negative  impacts  of  shipbreaking,  especially  in  South  Asia,  on  human  health  and  the 
environment without creating unnecessary economic burdens.  

Four  options  were  considered  to  address  these  objectives:  1)  a  continuation  of  the  current 
level  of  EU  activities  as  "baseline",  2)  a  policy  with  emphasis  on  voluntary  action  by 
shipowners and recycling facilities, 3) rules to implement key provisions of the forthcoming 
IMO Convention and complement it with certain mandatory provisions, and 4) an integrated 
policy approach combining selected legislative and non-legislative measures. 

The first option would imply a low level of EU activity, essentially relying on Member States 
for the implementation of the IMO Ship Recycling Convention in the longer term. Taking no 
additional  action  at  EU  level  would  mean  in  the  short  and  medium  term,  until  the  new 
international regime is in place and transposed by Member States, that the current trends in 
ship  dismantling  would  continue  unabated.  The  problems  of  enforcement  of  the  Waste 
Shipment  Regulation  with  regard  to  end-of-life  ships  and  the  decommissioning  of  a  ship 
outside the EU waters, will remain unsolved. 

The second option would favour non-legislative measures to promote voluntary action by the 
shipping  industry,  i.e.  encourage  shipping  companies  to  use  only  safe  and  environmentally 
sound ship dismantling facilities. It would focus on positive incentives and not on the stricter 
enforcement  of  the  current  EC  Waste  Shipment  Regulation.  Two  sub-options  are 
distinguished,  according  to  whether  incentives  should  be  used  to  encourage  clean  ship 
dismantling in the EU or candidate countries, or promote better practices worldwide. 

The impacts of the actions under Option 2 are summarized in the following table: 

Table 1: Measures to encourage voluntary action and their impacts 

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Sub-option / 
measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Affected group or concern: 

Likelihood / intensity 

Likelihood / intensity 

Recommended 
selection: 

Sub-option 1: 
Encourage dismantling 
in EU/OECD 

Subsidies for EU 
dismantling 

Environment  +  workers'  safety 
in South Asia: high / high 

Jobs  +  revenue  in  EU  recycling 
industry: high / medium 

Fishing in South Asia: 
medium / medium 

Jobs in South Asia: high / high 

Reject 

Costs for EU: high / high 

Revenue for industry in S. Asia, 
steel supply (especially 
Bangladesh): high / high 
Trade relations with South Asia: 
high / high 
Subsidies  could  lead  to  distortion 
of  competition  and  have  no 
support in EU state aid rules: high 
/ high 

EU coordination for 
warships 

Environment + workers' safety 
in South Asia: low / medium 

for  EU  navies: 

Costs 
medium 

low 

/ 

Reject  

Jobs + revenue in EU recycling 
industry: low / medium 

Environment  +  workers'  safety  in 
EU: low / low 

Sub-option 2: 
Encourage clean 
dismantling worldwide 

Campaign for voluntary 
agreements 

Environment  +  workers'  safety 
in South Asia: low / medium (but 
potentially  effective 
in  short 
term) 

Jobs + revenue in EU recycling 
industry: low / low 

EU certification & 
audit scheme 

Environment  +  workers'  safety 
in South Asia: low / medium  

Award scheme 

Jobs + revenue in EU recycling 
industry: low / medium 

Environment  +  workers'  safety 
in South Asia: medium / low  

Reputation for EU shipowners + 
other  participants:  medium 
/ 
medium 

Jobs + revenue in EU recycling 
industry: medium / low 

No major impacts 

Accept  

Costs  for  shipowners  +  recycling 
facilities:  low  /  low  (or  even  net 
positive) 

Accept  

Costs for EU: high / low 

Accept  

Technical assistance for 
developing countries 

Environment  +  workers'  safety 
in South Asia: medium / medium 

Fishing in South Asia:  
medium / medium 

Costs for EU: high / low 

Accept  

Effect on competition:  
medium / low 

Participation in pilot 
projects 

Environment  +  workers'  safety 
in South Asia: low / low 

No major impacts 

Accept  

Jobs + revenue in EU recycling 

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Sub-option / 
measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Affected group or concern: 

Likelihood / intensity 

Likelihood / intensity 

Recommended 
selection: 

industry: low / low 

Guidance for 
shipowners (global list 
of dismantling 
facilities) 

Environment  +  workers'  safety 
in South Asia: medium / medium 

Jobs + revenue in EU recycling 
industry: medium / medium 

Costs for EU research: high / low 

Accept  

1.1. 

The  actions  presented  above  as  acceptable  would  encourage  voluntary  actions 
by shipowners to improve the worldwide practice of ship dismantling, but will 
not necessarily address the gaps with regard to end-of-life ships in the current 
EU legislation. 

Under the third option, key elements of the future Ship Recycling Convention (survey and 
certification  requirements  for  ships,  essential  requirements  for  recycling  facilities,  and  rules 
on communication and reporting) would be transposed and complemented where necessary to 
fill  gaps.  Beyond  implementation,  additional  measures  could  be  envisaged  to  extend  future 
Convention standards to government vessels of Member States, to require EU-flagged ships 
go only to audited and certified facilities for dismantling, and to establish a list of ships ready 
for scrapping to improve the control system of the Waste Shipment Regulation for ships. In 
this context, some other possible actions - more prohibitions on hazardous materials in ships, 
stricter  obligations  for  pre-cleaning  or  a  ban  on  beaching  -  are  also  assessed.  The  option 
would  cover  other  measures  (guidance  documents,  IMPEL-TFS  projects,  infringement 
proceedings, cooperation with third countries) to ensure better enforcement of current waste 
shipment law with regard to end-of-life ships. 

The impacts of the actions under Option 3 are summarized in the following table: 

Table 2: Measures on ship recycling and their impacts 

Measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

Affected 
concern:  

group 

or 

Likelihood / intensity 

Recommended 
selection 

Measures to implement 
the IMO Ship Recycling 
Convention 

Inventory of Hazardous 
Materials, surveys and 
certificates 

Early  harmonization  of  safety 
rules in EU would  
- establish level playing field  
-  reduce  costs  for  shipowners  + 
shipyards 
- increase effectiveness of health 
+ safety controls:  
medium / medium 

No additional costs in relation 
to baseline (IMO Convention) 

Accept  

Requirements for ship 
recycling facilities 

No major impacts, potential 
reduction of costs for 
Management Plan 

No additional costs in relation 
to baseline (IMO Convention) 

Accept  

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Measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

Affected 
concern:  

group 

or 

Likelihood / intensity 

Recommended 
selection 

Information duties of 
recycling states 

Transparency, more effective 
implementation:  
 medium / medium 

Additional 
burden 
 medium / low 

administrative 
MS: 

for 

Accept  

Reporting requirements 
for shipowners + 
recycling facilities 

No major impacts, potential 
reduction of costs by rule on 
single contact point 

No  additional  costs  in  relation 
to baseline (IMO Convention) 

Accept  

Complementing 
measures 

Extension of rules to 
government vessels 

- Environment + workers' safety 
in South Asia,  
- Jobs + revenue in EU recycling 
industry:  
 medium / medium 
(higher if additional rules on 
sale of ships) 

More extensive bans on 
hazardous materials 

Marine environment : 
 high / high 

Workers' safety + health: 
 high / medium 

Stricter pre-cleaning 
obligations for EU-
flagged ships 

Environment + workers' safety 
in South Asia, low / medium 
- Jobs + revenue in EU recycling 
industry: low / medium  

Ban on beaching for 
EU-flagged ships 

Obligation for EU-
flagged ships to use 
only certified facilities  

Environment + workers' safety 
in South Asia, low / medium 
- Jobs + revenue in EU recycling 
industry: low / medium 

Environment + workers' safety 
in South Asia: medium / medium 

- Jobs + revenue in EU recycling 
industry: low / medium 

- Jobs + revenue in class 
societies: 
medium / medium 

Costs 
medium / medium 

for 

EU 

navies:  

Accept  

Environment  +  workers'  safety 
in EU: 
low / low 

Jobs  +  revenue  in  South  Asian 
facilities: medium/low 

Interference  with  EU  product 
legislation: 
 high / high 

Reject 

Competitive position of EU 
ship suppliers: 
 medium / high 

Effectiveness 
investigations: 
 medium / medium 

of 

risk 

Costs for shipowners: 
 medium / medium 

Reject  
(as ineffective) 

Re-flagging  of  EU 
 high / medium 

ships: 

Additional risks of accidents en 
route + for safety/ environment 
in SouthAsia: 
 low / medium 

Costs for shipowners:  
 low / medium 

Reject  
(as ineffective) 

Re-flagging  of  EU 
 high / medium 

ships: 

shipowners 

Costs 
for 
recycling facilities: 
medium / medium 

+ 

Accept  

Re-flagging  of  EU 
medium / medium 

ships: 

List of ships ready for 

Prevention of hazardous waste 
ship exports from EU:  

Administrative 
shipowners:  

burden 

for 

Accept  

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Recommended 
selection 

Measure 

Positive impacts 

Negative impacts 

Affected group or concern: 

Likelihood / intensity 

scrapping 

medium / medium 

Marine safety + environment 
(prevention of accidents) in EU: 
medium / medium 

Environment + workers' safety 
in South Asia: low / medium 

WSR enforcement 
measures 

Affected 
concern:  

group 

or 

Likelihood / intensity 

 low / low (higher for owners of 
older ships) 

Admin.  burden  for  authorities:  
 medium / medium  

Loss  of  revenue  for  EU  transit 
ports 
the  Mediterranean:  
in 
 medium / medium 

Guidance document on 
waste ships 

Prevention of hazardous waste 
ship exports: medium / medium  

Administrative  burden  for  EU 
+ Member States: high / low 

Accept 

Environment + workers' safety 
in South Asia: low / medium 

IMPEL-TFS project 

Prevention of hazardous waste 
ship exports: medium / medium  

Administrative  burden  for  EU 
+ Member States: high / low 

Accept 

Infringement 
proceedings 

Cooperation with third 
countries 

Environment + workers' safety 
in South Asia: low / medium 

Prevention of hazardous waste 
ship exports: medium / high  

Environment + workers' safety 
in South Asia: low / medium 

Prevention of hazardous waste 
ship export, transit and import: 
 low / medium (countries of 
destination), medium / medium 
(Egypt)  

Environment + workers' safety 
in South Asia: low / medium 

Costs for EU + MS: low / low 

Accept 

Administrative burden for EU 
+ Member States:  
 high / medium 

Accept 

The  fourth  option  combines  a  selection  of  rules  under  option  3  with  certain  supporting 
actions  under  option  2  in  an  integrated  policy  approach.  This  would  include  rules  to 
implement, as a priority, key elements of the envisaged Ship Recycling Convention as soon as 
adopted by the IMO diplomatic conference foreseen to take place in May 2009, in particular 
provisions concerning surveys and certificates for ships, essential requirements for recycling 
facilities and rules on reporting and communication. It would also include rules for the clean 
dismantling of warships and other government vessels and on certified dismantling facilities, 
and  a  list  of  ships  ready  for  scrapping.  Supporting  actions  would  mean  a  range  of  non-
legislative measures, such as a campaign for voluntary commitments, streamlining of shipping 
aids,  certification  and  award  schemes,  and  technical  assistance  to  developing  countries,  but 
not subsidies for ship dismantling in the EU.  

Table 3: Net impacts of measures under Option 4 (integrated policy approach) 

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Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

Inventory of 
Hazardous 
Materials, surveys 
and certificates 

of 

harmonization 

level  playing 

Early 
safety rules in EU would  
-  establish 
field  
- 
shipowners + shipyards 
-  increase  effectiveness  of 
health + safety controls:  
medium / medium 

reduce 

costs 

for 

No additional costs in 
relation to baseline (IMO 
Convention) 

Medium positive impact; no 
interferences expected.  

Requirements for 
ship recycling 
facilities 

No major impacts, potential 
reduction of costs for 
Management Plan 

No additional costs in 
relation to baseline (IMO 
Convention) 

Minor positive impact; 
no interferences expected. 

Information duties 
of recycling states 

Transparency, more 
effective implementation  

Minor  additional  burden 
for MS 

Minor positive impact;  
no interferences expected. 

Reporting 
requirements for 
shipowners + 
recycling facilities 

No major impacts, potential 
reduction of costs by rule 
on single contact point 

No  additional  costs 
in 
relation  to  baseline  (IMO 
Convention) 

Minor positive impact;  
no interferences expected.  

Extension of rules 
to government 
vessels 

Less pollution + health 
impacts from contaminated 
warships in South Asia,  

More jobs + revenue in EU 
recycling industry: 

Obligation to use 
only certified 
facilities  

Less pollution + health 
impacts from EU-flagged 
ships in South Asia 

More jobs + revenue in 
certified facilities, possibly 
in EU  

More jobs + revenue in 
classification societies: 

List of ships ready 
for scrapping. 

Prevention of hazardous 
waste ship exports from EU 

Contributes to protection of 
marine environment by less 
old ships + accidents in EU 
waters 

Minor impact on 
environment + workers' 
safety in South Asia 

Higher costs / less revenue 
for EU navies 

Medium positive impact;  
no interferences expected. 

Possibly minor impacts on 
jobs  +  revenue  in  South 
Asia 

Possibly minor impacts on 
environment  +  workers' 
safety in EU 

Higher costs / less revenue 
shipowners,  minor 
for 
certification 
for 
recycling facilities 

costs 

Possibly  out-flagging  of 
EU ships 

administrative 
More 
burden  for  authorities  and 
owners  of  older  ships 
through  monitoring  + 
controls 

Loss  of  revenue  for  EU 
transit 
the 
ports 
Mediterranean: 

in 

Medium  positive  impact,  if 
out-flagging. 
no  major 
Combination  with  campaign 
for  voluntary  action/CSR 
necessary. 

impact. 
Medium  positive 
Could 
with 
interfere 
encouragement  for  voluntary 
actions by shipowners. 

WSR enforcement 
measures 

- Guidance 
document on waste 

Better compliance with 
WSR / prevention of 
hazardous waste ship 

administrative 
More 
burden  for  authorities  and 
owners  of  older  ships 

impact. 
Medium  positive 
Rigid  execution  of  measures 
with 
interfere 
could 

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Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

through 
controls  

additional 

encouragement  for  voluntary 
actions. 

More administrative 
burden for EU + Member 
States 

but 

Potentially  medium  positive 
impact, 
successful 
cooperation with countries of 
likely.  No 
destination  not 
interferences expected. 

Higher costs / less revenue 
for ferry operators:  

Medium positive impact; no 
interferences expected 

ships 

exports from EU  

- IMPEL-TFS 
project 

- Infringement 
proceedings 

Cooperation with 
third countries 
(countries of 
destination + 
transit) 

Measures for 
voluntary actions 

Streamlining 
existing shipping 
aids 

Minor impact on 
environment + workers' 
safety in South Asia 

Possibly better compliance 
with Basel Convention / 
prevention of hazardous 
waste ship export, transit 
and import: 

Possibly medium impact on 
environment + workers' 
safety in South Asia 

Better compliance with 
WSR / prevention of 
hazardous waste ship 
exports from EU  

impact 

on 
Minor 
environment  +  workers' 
safety in South Asia 

More jobs + revenue in EU 
recycling industry 

Campaign for 
voluntary 
agreements with 
shipowners 

Possibly  medium  impacts 
on  environment  +  workers' 
in  South  Asia, 
safety 
especially in short term 

No major impacts 

Potential for positive impact, 
especially in short term. 
Interference by legislative + 
enforcement measures 
possible. 

Medium  positive  impact;  if 
transparent  +  broad  scheme 
no interferences expected. 

Minor  costs  for  EU  + 
industry  participants  (but 
presupposes  already  high 
standards). 

Award scheme 

Technical 
assistance for 
developing 
countries 

impact 

Minor 
on 
environment  +  workers' 
safety in South Asia  

Better  reputation  for  EU 
shipowners 
other 
participants 

+ 

Possibly more jobs + 
revenue in EU recycling 
industry 

Possibly  medium  impacts 
on  environment  +  workers' 
safety in South Asia  

Possibly  better  conditions 
for local fishermen in South 
Asia:  

Costs for EU funds 

Possibly distortion of 
competition with other 
recycling states  

Potential for positive impact, 
dependent  on  cooperation 
from 
recycling  state.  No 
interferences expected. 

Participation in 
pilot projects 

on 
Minor 
environment  +  workers' 

impacts 

No major impacts 

Minor  positive  impact.  No 
interferences expected. 

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Measure 

Positive impacts 

Negative impacts 

Net 
interference 

impact 

/ 

Guidance for 
shipowners (global 
list of "green" 
dismantling 
facilities) 

safety in South Asia 

Possibly  medium  impacts 
on  environment  +  workers' 
safety in South Asia  

Possibly more jobs + 
revenue in EU recycling 
industry 

No major impacts 

Medium  positive  impact.  No 
interferences expected. 

The  impact  analysis  of  these  options  presents  an  assessment  of  environmental,  social  and 
economic  impacts.  It  gives  an  indication  on  the  extent  to  which  each  of  the  options  can 
resolve the problem, and discusses the costs and possible drawbacks. As the Communication 
on  an  EU  ship  dismantling  strategy  does  not  represent  a  concrete  legislative  proposal, 
and  that  the  impacts  of  such  measures  that  may  be  adopted  subsequently  will  be 
analysed in  detail  in separate  IAs,  the level of analysis  is deemed proportionate at this 
stage. 

The conclusion of this IA is that the fourth option (integrated policy approach) is preferable, 
as it is the only one that can achieve altogether positive environmental, social and economic 
impacts in the short and medium as well as in the long term. This option would ensure a high 
level  of  compliance  with  current  waste  shipment  law  and  reduce  significantly  in  the  next 
years the negative impacts of shipbreaking on human health and the environment, especially 
in South Asia, without creating excessive burden on EU taxpayers.  

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