Shipping is often considered to be among the most polluting industries and a laggard when it comes to implementing sustainable practices. And when the current focus is placed on the reduction of air pollution and greenhouse gas emissions, there have been few similar discussions on the growing importance of end of life and “scrapping” of vessels. Current practices are associated with significant environmental, health and safety hazards with approximately 75% of ships being beached for scrapping in South Asia. Postdoctoral Researcher Melina Kourantidou investigates this in an informative blog post here.

On Wednesday 28th November at the SDU campus in Esbjerg, key stakeholders and partners got together for an initial discussion of the ambitious consortium project “Vessel Recycling and Circular Economy”. Working through the Blue SDU research network, the Department of Sociology, Environmental and Business Economics, in partnership with CBS Maritime, set in motion development of an ambitious project that aims to 1) advance technology and automation for closed-loop, sustainable vessel and offshore oil platform recycling, and  2) to explore the economic, technological and organisational feasibility of effectively creating Circular Economy innovation hubs around vessel recycling in key ports/maritime areas in Denmark.

The workshop provided a great networking opportunity and enabled a discussion on multidisciplinary research areas and approaches related to sustainable scrapping/ decommissioning of ships, and also including offshore oil platforms. It enhanced exploration of common grounds for further developing the project idea and securing the right funds for it.

The project welcomes and encourages cooperation between all stakeholder groups. If you are interested in collaborating or staying updated on its progress, please feel free to contact:
Eva Roth, Associate Professor at SDU via e-mail and telephone: +45 65 50 41 86
Petar Sofev, Research Assistant at SDU via email and telephone: +45 65 50 14 03

Highlights & Key outcomes

Presentations and open group discussion

The workshop started with a presentation by Melina Kourantidou (SDU) who gave an overview of the project idea and the key research questions to inform and stimulate discussion among the participants. Specifically, she presented a broad summary of what the consortium for the project proposal had been discussing so far, which includes: the main problem and its importance, the present state of the art, the affected stakeholders, the uniqueness and potential of the proposal, the expected benefits for stakeholders, the value expected to be generated, the value chain and key consortium (partners involved and desired for the proposal), as well as the key success factors and risks of the project. Melina’s presentation can be accessed Melina’s presentation can be accessed here.

Henrik Sornn-Friese (CBS) followed by focusing on the academic and industry perspectives for the project. He started off by explaining the interconnection between the two core research areas of the project which include Vessel Recycling and Circular Economy, as well as the key drivers and the vision for both. He described the lifecycle of a sustainable vessel and decomposed the main elements in each stage (from design to recycling). Henrik further explained the role of the circular economy in ports. Given the nature of the project, which requires an active involvement of both industry and academia. He took the time to analyse the different perspectives among the two and highlight the need for synergies and collaboration.

Aligning academic and industry perspectives creates opportunity

The discussion that followed included challenges and ideas brought up by the participants. An emphasis was put on the scope of the project as it stands at the moment; the idea behind the project is ambitious in encompassing not only decommissioning of ships but also considering oil platforms at sea. The collaboration with shipowners was discussed as well as the need to map the existing fleet and the existing needs (that such a project would target to meet). The role of shipbrokers was brought up by the audience along with their potential role.

The business case upon which the project should build was thoroughly discussed. It was pointed out that developing/advancing technologies for decommissioning should be combined with cost efficiency in order for the private actors (e.g. shipping companies) to have the right incentives to follow the pathway of a sustainable vessel recycling process. This implies that there is a need to build the right incentive-based mechanisms that will trigger the desired behaviour. On the other hand, the new list of EU-approved facilities and the new rules for decommissioning in the EU regulation (implemented at the end of 2018) are expected to determine to a large extent the landscape of scrapping in Denmark and in the rest of the EU. The current list of EU-approved ship recycling facilities can be accessed via the following link.

Open group discussion (structured in thematic categories)

In the second part of the workshop, the participants were called to share and discuss their thoughts openly, based on a structured set of thematic categories: Quality, Value Creation, Efficiency and Implementation. The key aims of the discussion evolved around 2 core themes: 1) Technological advancements -Automated solutions for closed-loop, sustainable vessel recycling and 2) Feasibility of creating Circular Economy innovation hubs around vessel recycling in key Danish port areas.

It is important to document and clarify how the project compares to the state-of-the-art and specify what is the circular aspect with respect to the outputs/parts of the ship. An example would be to specify what is the relevant type of operation and the relevant parts, e.g. welding, electric or metal parts, etc., as well as to closely examine which are the parts that can or should be automated (and distinguish them from those that cannot). Such a type of analysis can be guided by the needs of the Danish industry for the materials produced, given that the project has a focus on the circular economy. Understanding the degree of automation that is possible can drive this project to success, and Artificial Intelligence can play a key role (explore the Mærsk Mc Kinney Møller Institute work at SDU). Overall, the differentiating factor of this project has to come by specifying what are the technologies that can be developed in order to move the decommissioning process beyond just recycling.

The value creation is multi-layered spanning from benefits to the environment to ways that directly increase the value of scrapping, which creates the potential for increased revenues and therefore value from exporting the relevant know-how.

“The creation of highly-paid knowledge-intensive jobs in Denmark is a social value that was particularly highlighted.”

This however is something that should be carefully analysed, as automation might imply a reduction in employment opportunities (e.g. the ones involving manual work). In addition, the project will aim to specify and address what are the factors that will make international players in the field choose this Danish solution for decommissioning. Meanwhile, it is important to address that the outcomes of the project are not meant to undermine operations in developing countries but instead help improve and upgrade them. Ship dismantling in South Asia is an important part of the local economy and provides vital employment opportunities. The project is meant to create value by building and exporting know-how.

The discussion also covered the important topics of size of vessels and scale of related operations. Currently, there is a gap when it comes to small vessels that cannot be transported to South Asia for decommissioning. Evidence shows that small-scale vessels, such as fishing and recreational vessels, indeed represent a challenge and are often underestimated in terms of cumulative impact, especially from Southern European ports. Furthermore, the participants addressed fundamental questions, such as what has prevented a similar project from taking place already, and whether this is associated with a coordination failure.

“Existing practices of unsustainable ship decommissioning, especially in South Asia, were identified as mainly losses for society rather than companies.”

This points at the importance of economics in this project and specifically at the need to identify those incentive-based mechanisms that can alter firms’ behaviour. As long as unsustainable practices remain less internally costly, it will be hard to convince firms to take a different, more expensive pathway despite the fact that the industry explicitly recognises the need for changes in the way decommissioning is currently taking place.

Having identified the need to map the existing technologies (technological readiness), the participants engaged in a discussion exploring some of these. They first recognised that there are similarities in the capacity for shipbuilding and decommissioning with the potential for the same ports/shipyards to be capable of handling both (cradle to cradle perspective). Those similarities are also reflected in robotics. For example, robots that are being used for many different purposes, including vessel maintenance. Artificial Intelligence is already being used to some extent, e.g. for welding in the port of Lindø.

Brainstorming Session and Group Discussion

The workshop concluded with a lively brainstorming session where the participants were asked to narrow down their thoughts to a few bullet points. These were then grouped and were openly discussed, striving to identify the most important challenges and opportunities of his project. Overall, the workshop proved quite successful in bringing forward the project idea. The main aim of this initial stakeholder discussion was to tap into the intradisciplinary experience of the participants, form collaborations and pave the way forward.

We truly look forward to an exciting 2019 for this ambitious project and to contributing to the green transition within the maritime sector and beyond. If you have reached the end of this post, we also encourage you to get in touch with us to share your thoughts and ideas. We particularly welcome collaboration ideas from the private sector as we recognise its pivotal role in progressing this project forward.

You can reach out to Eva Roth, Associate Professor at SDU via e-mail and telephone: +45 65 50 41 86 or Petar Sofev, Research Assistant at SDU via email and telephone: +45 65 50 14 03

We will also make sure to keep you updated as the project develops and are already planning the next workshop. You can also follow the hashtag #ShipRecycleDK on Twitter for relevant news and developments.