The European Union has extended the directives on the criminal protection of the environment, which means new requirements for ship recycling.
The new directive will increase pressure in the industry to ensure that ships are scrapped in accordance with the law. The use of non-certified shipyards will be explicitly punishable.
The current situation is that environmental offences are prosecuted under the Waste Shipment Regulation (2006). In addition, there is the national implementation for the protection of the environment under criminal law (2008/2009). In Germany, these requirements are implemented by the Waste Shipment Act.
The Ordinance on the Recycling of Ships (Ship Recycling Ordinance) has also been in force since 2013. This states that ships may only be recycled at shipyards that are certified by the EU. This excludes shipyards in countries such as India, Pakistan and Bangladesh, which scrap the majority of disused ships.
Violations of the Ship Recycling Ordinance have not yet been expressly punishable in Germany. As the law firm ERG reports, several proceedings are currently underway in Germany against individuals who were involved in the sale of ships that were later scrapped at a non-certified shipyard.
Ship recycling at shipyards without a certificate will be a criminal offence
This is set to change in future and create a clear legal situation: ship recycling at non-certified shipyards will be explicitly punishable. The new 2024 directive includes twice as many penalties as were previously stipulated in the 2008/2009 directives. Members must implement the new requirements by 21 May 2026.
The penalties have also increased. Under the Ship Recycling Regulation, natural persons face a prison sentence of up to five years and are also excluded from management positions and public offices. However, member states can impose even higher penalties.
In the future, legal entities – i.e. companies – will also be affected by the sanctions. The fines will increase from a maximum of € 10m to up to 5% of the company’s total global turnover that has profited from illegal ship recycling. The amount is capped at € 40m. The financial value of such a ship sale is confiscated and companies can also be obliged to bear the costs of remedying environmental damage.
The “Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships” (HKC) will also come into force alongside the Ship Recycling Ordinance from 26 June 2025. The two will coexist in the future. Shipowners should note that a shipyard certified in accordance with the HKC does not also meet the standards of the Ship Recycling Regulation – if the EU certificate is not available, this will still result in prosecution.
As soon as the new directive is implemented in 2024, the risk of prosecution under the Ship Recycling Regulation is likely to increase significantly. Companies should urgently keep an eye on developments and take the imminent changes into account when planning sales.
