Flag-Hopping Undermines EU Ship Recycling Guidelines: European Commission Finds
The European Commission has raised concerns over shipowners undermining the effectiveness of the EU Ship Recycling Regulation (SRR) by engaging in flag-hopping—a practice where vessels switch to non-EU flags before dismantling. While the regulation, which has been in place since 2018, has made progress in improving ship recycling practices, its full potential is being hindered by these evasive manoeuvres, according to a recent evaluation released in late February 2025.
Progress and Challenges of the SRR
The SRR mandates that EU-flagged vessels be recycled at approved facilities listed on the European List, which currently includes 43 shipyards—31 in Europe, 11 in Türkiye, and one in the United States. In the latest 14th edition of the list, the EU added new facilities from the Netherlands and Türkiye while removing shipyards in Lithuania, Türkiye, and Latvia. The regulation aligns with global standards, such as the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, which will come into force in June 2025, with full compliance expected by 2030.
Despite these advancements, the Commission’s report identified significant obstacles that limit the effectiveness of the SRR. The most pressing issue is shipowners circumventing EU regulations by switching to non-EU flags before dismantling their vessels. This loophole allows them to sell end-of-life ships to cash buyers who send them to South Asian yards, where safety and environmental standards are significantly lower than those required by the EU.
The Dangers of Shipbreaking in South Asia
According to NGO Shipbreaking Platform, a Belgium-based organization, most global shipbreaking continues to occur under hazardous conditions. In 2024, 80% of scrapped vessels—255 out of 409—were dismantled on the beaches of Bangladesh, India, and Pakistan. These countries, though they have ratified the Hong Kong Convention, still face significant challenges in implementing strict safety and environmental measures.
China was identified as the worst offender in 2024, having sent over 50 vessels to be dismantled, primarily in Bangladesh. Additionally, companies from Switzerland, Russia, South Korea, and the Philippines contributed to the problem by beaching over a dozen ships in these regions. The statistics were even worse in 2023, with 85% of 446 decommissioned vessels dismantled in these hazardous conditions.
NGO Shipbreaking Platform Calls for Regulation Expansion
Given the scale of regulatory evasion, the NGO Shipbreaking Platform has called for the EU to extend the SRR beyond flag-based jurisdiction and instead enforce compliance based on ship ownership. This approach would prevent shipowners from dodging EU regulations by changing a vessel’s flag just before its end-of-life stage.
Poor Hazardous Materials Inventories Add to the Problem
Another significant issue highlighted in the Commission’s evaluation is the poor tracking of hazardous materials onboard ships. These inventories are crucial for ensuring safe and environmentally sound dismantling, but they are often incomplete or of low quality. The evaluation found that 45% of EU-inspected ships failed to comply with inventory requirements, with many lacking a hazardous materials inventory altogether during operation.
This lack of documentation makes it difficult to safely dispose of hazardous substances such as asbestos, lead, and heavy metals, increasing risks to workers and the environment in shipbreaking yards.
Proposed Solutions to Strengthen Ship Recycling Rules
In response to these challenges, the European Commission is considering several measures to close regulatory loopholes. One potential solution is the introduction of a ship recycling license, which would help bridge the price gap between EU-approved yards and cheaper, less regulated facilities in South Asia. This license could be designed to provide financial incentives for shipowners to comply with EU recycling standards.
Another proposed reform is shifting compliance responsibility from the vessel’s registered flag to its beneficial owner. This move would make it significantly more difficult for shipowners to evade EU regulations by simply changing their ship’s registration before dismantling.
Future of Ship Recycling in the EU
As the Hong Kong Convention comes into force in June 2025, the need for stronger enforcement mechanisms within the EU becomes even more urgent. While the SRR has laid a foundation for responsible ship recycling, its success depends on eliminating loopholes and holding shipowners accountable.
With the European Commission exploring new regulatory approaches, the coming years could see stricter measures to curb flag-hopping and ensure that all ships operating under EU ownership or influence adhere to environmentally responsible recycling practices. However, without decisive action, the industry’s worst offenders will likely continue to exploit existing weaknesses, putting both workers and the environment at risk.
