Data gathering and impact assessment for a possible technical review of the IPPC Directive – Part 2
Fact sheet B6 Ship Yards
Potential amendment B1: Extension of current activity definition, covering installations for the building of, and painting or removal of paint from ships with a capacity for ships 100 m long
Status: final –12/09/2007
1. Issue
Aim of the study: This fact sheets identifies the issues related to the possible addition of installations for the building of ships, and the painting of or removal of paint from ships, with a capacity for ships 100 m long to Annex I of the IPPC Directive. The present study is based on a background literature survey and meetings with relevant industry. It also takes into account the comments of the Advisory Group members on the draft final report.
Background: These activities are currently not covered under the IPPC Directive, and there have been calls for environmental regulation of the sector to be extended by including it in the IPPC Directive. This activity will fall within the scope of the E-PRTR which will succeed the existing EPER. To maximise the consistency between the IPPC-Directive and the E-PRTR the inclusion of this activity into Annex 1 of the IPPC Directive is assessed.
Issue summary:
The following options will be further analysed in this fact sheet:
- Business as usual (i.e. no addition to the list of covered activities)
- Addition of installations for the building of, and painting of or removal from, ships, with a capacity for ships greater than 100 m length.
- Addition of open air installations for the repairing and maintenance of ships, with a capacity for ships greater than 100m length.
In the first option the different approaches of MS and inconsistencies will remain. In the second option both the shipbuilding and ship repair and maintenance sector is included in the scope of the IPPCD. In the third option the shipbuilding is not included, because of the lower environmental impact of this sub-sector.
2. Current Practice
2.1 Scope of the Sector
For historical reasons, the shipbuilding and ship maintenance (painting and removal of paint), repair and conversion industries have been considered to be one single industry. However, during the last decades the European shipbuilding industry had to face strong global competition and went through a period of rationalisation and restructuring. In this period the shipbuilding sector developed itself from a labour intensive manufacturing industry into a highly automated and technological advanced assembly industry subcontracting most of the ships component (eg. engines) manufacturing.
This evolved into a situation where the highly planned and automated shipbuilding activities can hardly be combined with the flexible and labour intensive nature of maintenance and repair activities despite the fact that in general the same activities occur (metalworking, painting, installation of devices,…).
Therefore, most of the shipbuilding companies have shed their maintenance, repair and conversion activities or split the company into two separately operating entities. There is also a growing body of opinion to split up this sector in two sub-sectors: the shipbuilding and the ship maintenance/repair/conversion industry. Currently they are covered by one NACE code (NACE 351) and most of the economical, social and environmental data has been collected conjointly. [1]
CESA, the community of European shipyards, covers more than 300 European (including Norway and Croatia) shipyards. Most of them are located in The Netherlands (84), Germany (56), the UK (27) and Spain (27). Other EU-MS have less than 10 shipyards. [2]
About 150 of the European shipyards have installations for the building of, and painting of or removal of paint from, ships, with a capacity for ships 100m long. About 40 of them are active in the global market for large sea-going commercial vessels. [3]
2.2.1 Shipbuilding[3]
Shipbuilding can broadly be classed as an assembly industry which can be divided into two parts:
- Steelwork[1]: the pre-fabrication, assembly and erection of the steel structure of the ship;
- Outfit: the installations of the systems, equipment and fittings into the ship.
Traditionally the two parts of the building process were undertaken sequentially, with outfitting starting once the steel structure had been finished. Increasingly since the 1960s these two stages have been undertaken as far as possible in parallel to improve efficiency.
The basic unit of the ship’s structure is a steel panel constructed from plate to which steel bars are welded to give adequate stiffness. Steel plates and bars are cut to a predetermined shape prior to fabrication, with the cutting process being automated in a modern shipyard. Much of the flat panel production can also be automated using ‘panel assembly lines’ that require little human intervention to produce large quantities of fabricated steel.
Flat and curved panels are joined together to form three-dimensional steel assemblies. As much outfit equipment and fittings as possible are incorporated into these assemblies at the earliest stage since the cost of outfitting increases significantly as the shipbuilding process proceeds. Assemblies may be further blocked together before final erection in the building dock or on the slipway. Most leading shipbuilders now build in docks. The limit on the size of block that can be erected is determined by the capacity of the dock. Fundamentally, the larger the block that can be erected at this stage, the more efficient the shipyard can be.
One of the key bottlenecks in the shipbuilding process is the capacity for painting. Traditionally this was the last activity undertaken after all other work had been completed. As with other processes, painting is now undertaken at an early stage and as much as possible is completed prior to erection of the blocks. Shipbuilders have made significant investment in recent years in painting facilities to improve quality and reduce waiting time for paint to cure. As a consequence, painting activities take place in more controlled conditions. Painting activities might result in environmental impact as the paint particles and VOC emissions can be emitted to the surrounding air, water and soil.
The cycle time for production depends on the efficiency of the shipyard and the product concerned. The typical production period for a bulk cargo ship may be of the order of six to nine months and for a cruise or LNG (liquefied natural gas) ship up to two years or more.
2.1.2 Ship maintenance, repair and conversion (application and removal of paint and coatings)
As with the ship building industry, in the ship maintenance, repair and conversion industry a lot of the activities are subcontracted. However, contractual responsibility remains with the yard when it opts to use sub –contractor rather than its own employees to undertake particular tasks. [2]
Ship maintenance [4]
Ships are largely constructed from shipbuilding steel. This material corrodes or deteriorates if unprotected and must, therefore, be preserved by means of corrosion protection systems. Corrosion protection enhances ship safety during passage, maintains the ship’s value and reduces maintenance costs. Different parts of a ship, e.g. the hull (above and below water), outside decks, hold and tanks, are exposed to a varying degree of corrosion so that different corrosion protection systems are applied. The key issues for the painting of merchant ships are adhesion, corrosion protection and prevention of fouling. Regularly these coatings needs to be removed and the ship will be repainted.
Coating systems consist of one or more layers of solvent-based, low solvent or non-solvent coatings. In repair and maintenance yards, the ship-owner has a large influence on the coating choice and may purchase the coatings directly .
Maintenance activities have to deal with more uncertainties, and work with a much shorter job duration as compared to ship building. In one ship maintenance installation between 50 and 150 ships per annum can be handled.
Ship repair and conversion
In the repair and conversion industry, generally the same activities occur as for the shipbuilding industry. However, there is a difference with the shipbuilding industry regarding the frequency and/or the technical approach.
Similar to a shipbuilding yard, a conversion shipyard will complete only a few ships a year but can not work according to the concept of joining pre-assembled blocks. The conversion of a ship has to deal with the dimension of the already existing ship which makes it more difficult to work in the same planned and controlled conditions
The repairing of a ship is in most cases a non planned activity which may take place a few times in the ship’s life span. The most important repair activities – from the environmental impact point of view – are the painting activities, metalworking and welding. Some repair activities, especially small metalworking and painting activities above the waterline, can easily be executed from the quayside. There is no technical need for bringing the ship into a dry dock. If the ship does not have to be docked, the costs for renting the drydock can be avoided. It depends on the local legislation or harbour code which quayside activities are allowed and which protective measures need to be taken to minimise their environmental impact. It is clear, however, that for some activities (eg blasting, painting) a quayside reparation can not ensure the same level of environmental protection compared to the dry dock approach.
Figures on the amount of quayside reparation activities were not found.
Note:
It is important to bear in mind that covering the installations for the repairing/maintenance of ships by the IPPC Directive will not affect the quayside activities despite the fact that quayside activities are considered to result in higher environmental impacts per repair activity compared to the controlled conditions of a dry dock.
2.2 Size and Structure of the Sector
2.2.1 Shipbuilding [3]
In order to understand the current position of the shipbuilding industry it is necessary to understand the development of the industry in the late 20th century. Figure 1 presents a graph of the output from the global shipbuilding industry, in gross tons, between 1960 and 2002.
Figure 1: Global shipbuilding output since 1960 (million GT)
Since 1990 shipbuilding has again been a high-growth industry. This can be explained by the fact that the average life expectancy of ships is between 20 and 25 years. As a lot of ships have been build in the early 1970s, this would mean that a comparable amount of new ships needed to be build in the 1990s to replace them. In addition, world trade continues to expand and the fleet needs to expand to accommodate this. Regulatory developments also have a significant influence on demand. The requirement for tankers to meet higher standards of pollution prevention (e.g. phase-out of single hull tankers in the EU) has led to an increase in the production of new ships. Finally, some developments in the past decade, in particular in containerization, the expansion of the cruise holiday market and the expansion in use of LNG as a fuel source have led to a significant demand for new ships in these categories.
By the end of 1991, prices had reached a level whereby the newbuilding price subsidy permitted within the EU could be phased out and the OECD was making good progress towards an agreement on the global elimination of subsidies in shipbuilding. What had not been anticipated was that prices would fall over the 1990s, even as volume increased rapidly: between 1991 and 2000 prices fell on average by one third. Since the bottom level of mid 2002 newbuilding prices have experienced a significant increase reaching their peak around May 2005 and decreasing slowly afterwards for several months. Towards the end of 2005 and the first half of 2006, the price index showed again a slight up-ward trend. [5]
The world shipbuilding market suffers from low profit margins, trade distortions and generally widespread subsidisation (also in the EU – see Council Regulation (EC) No 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding). Therefore, major players decided in October 2002 to launch a new round of negotiations to address both unfair pricing practices as well as subsidisation in order to restore normal competitive conditions in the world-wide shipbuilding market.
European context:
In 2004, European shipyards completed 360 ships (sea-going vessels, not including yachts or pleasure boats), representing more than 4 million compensated gross tonnes (CGT), 17% of the world market share in volume (equal to 2000-level). Of the total volume in CGT, 26% was container ships, 24% passenger ships and 12% product and chemical carriers (other types of ships built in the EU are ferries, other cargo vessels, RO-RO-vessels, LNG and LPG carriers, fishing vessels, crude oil tankers, bulk carriers). Its value was more than € 10 billion – about 30% of world turnover. [4]
There are some 150 shipyards in Europe, with ca. 40 of them active in the global market for large sea-going commercial vessels. Compared to the main competitors Japan and Korea, with 5 and 6 major shipyards, respectively, the European shipbuilding industry is fragmented across the Union. [3]
Ca. 100,000 people are directly employed by yards (in commercial and naval shipbuilding as well as in ship repair); another 350,000 people are working in the supply industry (about 9,000 companies) The turnover of the entire EU shipbuilding industry (building and repairing of ships) is around 34 billion euro. [6]