Yard capacity in the EU

Although the Yards on the EU List offer sufficient theoretical capacity for the EU flagged fleet, the gap in prices between Turkish yards and ‘the rest’ is just too large.

Of the 43 yards on the EU list, some of which are not even operational, only the eight Turkish Yards are capable of recycling vessels on commercially competitive terms – they are all based in Aliaga, Turkey.

The European Commission closed a feedback period for the extension of the list of approved EU SRR breaking yards on 31st August, paving the way for implementation of the 7th version that includes two further Turkish yards adding 130.000 mts/ldt recycling capacity (Simsekler: 70.000 ldt, Avsar: 60.000 ldt) to the list which now features eight Turkish yards. This additional capacity comes at a time when Aliaga beach is overcrowded, leading to many questions being raised about the recycling capacity of yards on the EU List.

The economic effects of Covid-19 have resulted in increased scrapping activity among European shipowners, while recycling yards either closed or drastically reduced their operations during the first ‘lock-down’ period from March/April to June.

Out of the 210 Vessels that were recycled in the year to date, a total of 179 were recycled in the sub-continent while only three vessels were recycled in EU based Yards and 20 ended up in Turkish Yards. In terms of capacity, the deleted 21,900 mt/dwt of the EU based Yards represent only 4% of the 561,269 mt/dwt deleted in Yards in Turkey and the EU combined.

While there are EU approved yards that can physically accommodate large commercial vessels, they cannot pay the prices needed to make them commercially viable options – or at least not currently – unless ship-owners are willing to subsidize recycling operations, which the majority cannot afford at this time.