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SSI workstream - Closed-loop materials management
The Closed Loop Materials Management (CLMM) project: - Implemented three pilot projects to collect materials data from ship construction using Hewlett-Packard's CDX system for tracking. - Found that a complete record of materials used increases a ship's value and helps comply with regulations. - Faced challenges in getting suppliers to provide detailed data due to the effort required and lack of incentives. - Concluded that an industry standard for materials reporting and incentives are needed to fully realize the benefits of closed-loop materials management in shipbuilding.
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SSI workstream - Closed-loop materials management
- 1. Closed Loop Materials Management(CLMM) With Knowledge Partners
- 2. Contents Overview and process Thefindings Materials flow and closing the loop What’s next Appendix 1 Pilot projects Appendix 2 Stakeholder Consultation Appendix 3 Ship waste streams research Appendix 4 Regulatory Context
- 3. Our vision, isto achieve end-to-end responsibility and accountability for the social and environmental impacts of the materials used to build ships, from their sources from construction through to recycling Our challenge was to look at how ships could be designed, built, operated and dismantled to drive higher value and better recycling of materials and components. Our aim is to understand the feasibility and value of tracing and tracking the materials used in ship construction. The CLMM challenge
- 4. Summary of CLMM TheClosed Loop Materials Management (CLMM) work stream: • Implemented three pilot projects to investigate the value of collecting data about materials used in ship construction • Worked with Hewlett-Packard to trial the use of their CDX system to track and trace the materials’ data being collected • Carried out a stakeholder consultation to explore the opportunities for a closed loop economy in the future
- 5.
- 6. Findings in summary •A verified record of all materials used in a ship’s construction can increase its value • A fully operational materials database provides a single source of data for reporting on various existing regulations, as well as future-proofing against potential additional compliance reporting requirements • Increased transparency and traceability leads to open supply chain relationships and opportunities for remanufacture as well as more 'upcycling' and reuse • Establishing an effective culture of tracking materials enhances social responsibility and takes time and commitment
- 7. Initiating a trackingand tracing process has been challenging Starting from nothing • The scale of the pilot projects was immense – to collect details about 95% of the materials used in a new ship • This process was further complicated by a lack of rewards for participating suppliers; conflicting priorities; resistance from some; a perceived threat to commercial sensitivity; varying levels of awareness and interest; cultural differences and no incentives on offer “Our goal was to develop a material passport listing and describing the materials used to build these ships, where they are located and how they can be correctly dissembled and recycled” Mads Stensen Maersk Line
- 8. Initiating a trackingand tracing process has been challenging Talking about it • The result has been that a one of the major areas of work has been about raising awareness, engaging with everyone involved and training people to collect the data and use the CDX system “There is no reference for this kind of activity in shipbuilding and it has been a big learning opportunity. Maersk Line’s leadership has been the main driver and as time goes by the results will get better and better.” Nuno Kim DSME
- 9. Tracking and tracing materialsis time consuming Getting to work • Tracking and reporting data on material composition from suppliers takes a lot of time. • Ensuring a high quality of data requires resources and clearly defined reporting guidelines – which are still under development as part of the pilot projects “The project involved introducing a new concept to the shipyard and suppliers and we did not expect findings to be 100% positive. We were however very satisfied and pleased with the level of co-operation once the goals and methodology were explained” Simon Bennett China Navigation Company
- 10. Tracking and tracing materialsis time consuming Technology is essential • Introducing and using a data reporting tool (such as the CDX) is essential for processing and managing such a large amount of complex data - and is inevitably not straightforward to use “Cabin suppliers compete on both quality and weight of cabin design when bidding for contracts so care was taken to establish accurate weights whilst maintaining supplier anonymity” Adam Horwood Carnival
- 11. What can wereport so far? • The feedback from stakeholders is that when buying or selling a ship having a detailed breakdown of all materials used, including weight and location of manufacture could significantly increase its value - Appendix 2 • The things that make ship recycling difficult are the unidentified materials, coatings, adhesives and (PU and plastic) composites and they also often go unspecified in designs and plans
- 12. What can wereport so far? • It has taken the car industry more than 5 years to get close to 100% materials data reporting (and that is with legislation) • Demand is high for second hand aircraft parts and the aircraft salvage industry works because there is a detailed, traceable record of every part in every aeroplane, enabling efficient re-use • We are helping to raise awareness within the industry of issues around ship dismantling and recycling
- 13. Materials flow andclosing the loop
- 15. Initially increases costs,then supports better relationships and raises standards including quality, environment, health and safety Greater transparency creates opportunities for improving design for reuse and recycling Collecting 100% materials data the first time is time consuming and costly – it gets easier subsequently There are commercial and reputational benefits available to early adopters
- 16. “A challenge forusing systems like the CDX is defining the system boundaries and making sure that the data is collected and logged in a way that makes it easy to update and maintain over time for instance when repairs are carried out and components replaced.” Green Ship Recycling Henning Gramann
- 17. *IMDS is thetracking and tracing system used in the European automotive industry “Data from the IMDS* system helped us to track down and eliminate Chromium 6, it has helped in the reduction of lead, the identification of plasticisers in materials and it is been essential in complying with REACH. ”It has also made our customs declarations easier and more efficient” Karin Oldenburg BMW
- 18. Material tracking iscost neutral for owner - maintaining records through life needs to be planned Responsible owners get preferential rates of finance, insurance, and port fees Vessel has higher residual value and owner is in a stronger negotiating position when time comes to sell 100% materials data provides future proofing against changes in reporting regulations
- 19. “It is importantto keep things practical, relevant and worthwhile for owners” Saurabh Sachdeva BP Shipping
- 20. “We prefer towork with ship owners that are committed to their corporate responsibility because it helps to reduce risk for the bank - it is a good indicator of ships being well managed and maintained” Gust Biesbroeck ABN AMRO
- 21. 100% materials data increasescertainty, commercially, socially and environmentally
- 22. “Uncertainty is what makesship recycling and reuse difficult – unidentified materials and residues make it lot more complicated and expensive to break up vessels safely and effectively.” Antonio Barredo DDR Vessels
- 23. This is nota closed loop… yet
- 24. Upcycling, re-use andrecycling Much of the high grade steels are down-cycled or lost “Steel recycling rates are already very high and the better the level of material segregation the easier it is to track and retain steel making alloys through recycling. Our focus is on what happens at the end of life and this includes designing for recovery, reuse and easier dismantling, for example with more bolts and less welding” Tata Steel UK Peter Hodgson
- 25. Upcycling, re-use andrecycling Ship recycling and re-use rates are inversely proportional to health, safety and environmental considerations. “Recycling and reuse rates vary depending on the location - in India, Bangladesh and Pakistan more is re-used, whereas in Turkey less probably gets recycled by weight but they focus on the higher value materials. And many places do not have the capital investment and infrastructure to maximise recycling and or handle hazardous materials safely” Green Ship Recycling Henning Gramann
- 26. Closing the loop Accordingto research by the University of Strathclyde; to close the loop at the end of a vessel’s life it is important to know: • What materials are on- board • Where they are located • How much of that material there is Currently within all stages of the materials flow this information is neither available or accurate – see Appendix 3 for more information
- 28. Implementing a system fortracking shipbuilding materials and components supports increased transparency and responsibility throughout the supply chain and life cycle
- 29. What are thelessons for the future Establishing standards • An industry standard for data reporting would reduce complexity and ease workload for all involved • It would reduce resistance from stakeholders and increase awareness on the materials tracking and tracing concept • From these pilot projects it is clearer what information is needed and what information is not, which will ease the burden of data reporting further in the future
- 30.
- 31. Remaining opportunities • Continueto trial capturing data using the online system • Include compliance reporting functionality to use the materials data to meet reporting requirements (e.g. IHMs) in the medium term, and inform better dismantling and recycling practice in the long term
- 32. Remaining challenges andbarriers • Collecting and maintaining detailed materials data has worked in other industries due to a combination of regulation and financial incentives • Having an industry standard process for collecting and reporting materials data developed and widely accepted • The challenge to the shipping sector is to create a similar environment which promotes upcycling and re-use as the preferred option.
- 33. What’s next? • Closingthe loop – getting ship steels back into new ships (or equally high grade uses) • Balancing human rights and workplace safety with recycling rates – leading to a more responsible approach to ship breaker selection and management
- 34. Resources Link to TripleE website Link to Hewlett-Packard’s CDX System Appendix 1 - Pilot project details Appendix 2 - Stakeholder consultation details Appendix 3 - University of Strathclyde research Appendix 4 - Regulatory Context
- 35. Thank you With Knowledge Partners Preparedby Polly Simpson [email protected] www.ssi.2040.org
- 36. Appendix 1 PilotProjects
- 37. Three pilot projects Thethree pilot projects were selected from new ships being built and delivered to SSI members during 2012-2013. • Collecting so much data required willing participants working on live ship building projects Our remit was to test the idea of using a materials tracking system to capture data about 95% by weight of all the materials used in building a ship. • Hewlett-Packard’s CDX is an established system and our pilot projects were given access to it
- 38. Pilot Project –Maersk Line At a glance… • Leading the development of material passports for ships • Using new Triple E vessels to pilot the initiative Maersk Line required that the new Triple E containerships being built by DSME are delivered with a detailed breakdown for at least 95% of the materials used, by weight.
- 39. Pilot Project –Maersk Line What can you report so far? The data collection is not finished yet, but we already have data for 75% of the vessel weight. How has it gone? • Our main challenge has been the management and training of suppliers to use the new IT tool and do something completely different • It has been difficult and time consuming to collect high quality data from the whole supply chain What else … Next time we’ll use what we’ve learnt from this pilot and be more selective about the data we collect.
- 40. Pilot Project -DSME At a glance… • 18,300 TEU Containerships • 63,800 metric tons • Target 95% material date by weight DSME provided material data of hull steel structure including details of the location and material composition of each grade of steel used in the construction of the Triple E ship.
- 41. Pilot Project -DSME What can you report so far? Progress is much slower than expected: • Many different parties involved • Providing information is regarded as additional work What did you learn? • Each participant needs to be persuaded of the need for this work • It is important to demonstrate visible and tangible outcomes • More immediate commercial rewards and/or legislation would help to increase the uptake What else … DSME is continuing to work with its supply chain so the remaining “Triple-E” vessels are delivered with a satisfactory “Material Report”.
- 42. Pilot Project -Carnival At a glance… • Cruise ship balcony cabin • 2.3 metric tons The pilot project involved identifying the component parts of a typical standard cruise ship balcony cabin module and establishing the weight of all constituent materials.
- 43. Pilot Project -Carnival What can you report so far? Capturing and reporting materials data for hull steelwork, ship superstructure and main machinery components are all relatively easy. Everything else is both difficult and time consuming What did you learn? • A modern European shipyard can provide a total weight estimate of the ship steelwork to within 200 tonnes. What else … • A moderate investment would enable this accuracy to be increased, and the precise location of all steel grades and main machinery component masses incorporated into the ship’s electronic plans. • From a commercial perspective, going beyond this scope brings rapidly diminishing returns on investment
- 44. Pilot Project –China Navigation At a glance… • 31,000dwt Multi-Purpose Vessels • Built at Ouhua Shipyard near Shanghai The materials going into the construction of these new vessels have been tracked and recorded using the CDX. The objective being to facilitate more energy efficient and value- added recycling, and even up- cycling, at the end of the assets working life.
- 45. Pilot Project –China Navigation What can you report so far? Our target was to obtain data on 90% of the material in the ships by weight. We succeeded in collecting data on 96.86% of the pilot project ship’s lightweight. What did you learn? • A dedicated person collecting and collating the data proved invaluable both to explain what was needed to the supply chain and to input the data • In future the supply of material data needs to be part of supply contracts What else … • For the data to be useful during the vessel’s lifecycle it must include location information for components and materials • We need to explore how data can be maintained and used throughout a vessel’s working life.
- 46. Appendix 2 StakeholderConsultation
- 47. Stakeholder consultation How didwe get on? • We carried out more than 20 in-depth interviews. • Our biggest challenge was talking about hypotheticals – until vessels with 100% materials declarations come to the end of their working lives we will not know for sure the benefits and value that tracing and tracking adds. • It has been great to learn about the economic value that material transparency is adding in different sectors
- 48. Why this approachto stakeholder consultation The stakeholder consultation was developed to give us a better understanding of how and where this level of detailed materials data could add value. Who was involved and where? We talked to the full range of stakeholders in shipping and in the other sectors facing similar issues about materials data. This included: • Individuals and organisations involved in owning, operating, buying, selling, dismantling and recycling ships • Component and materials suppliers • Specialists in other sectors where there is a more circular economy and/or materials management is better established
- 49. What did wedo? We asked questions about: • How using a tracking and tracing system could add value and deliver benefits (beyond compliance) • The costs and resources required to capture and verify the materials data • The affect of tracking and tracing on supply chain management, relationships and end-to-end responsibility and accountability
- 50. What’s important aboutthat? We wanted to establish the ‘business as usual’ baseline from where to explain how and where a tracing and tracking system could provide value.
- 51. What they toldus LiteHauz – Frank Stuer Lauridsen “One of challenges for effective recycling is having the value stay with the vessel rather than going to the last owner” ABN AMRO – Gust Biesbroeck “We prefer to work with ship owners that are committed to their corporate responsibility because it helps to reduces risk for the bank - it is a good indicator of ships being well managed and maintained” DDR Vessels – Antonio Barredo “Uncertainty is what makes ship recycling and reuse difficult – unidentified materials and residues make it lot more complicated and expensive to break up vessels safely and effectively. Having detailed information about the materials used in a ship would reduce uncertainty and make the job easier.” BP Shipping - Saurabh Sachdeva “It is important to keep things practical, relevant and worthwhile for owners”
- 52. What they toldus Green Ship Recycling - Henning Gramann “Recycling and reuse rates vary depending on the location - in India, Bangladesh and Pakistan more is reused whereas in Turkey less probably gets recycled by weight but they focus on the higher value materials. And many places do not have the capital investment and infrastructure to maximise recycling and or handle hazardous materials safely” “A challenge for using systems like the CDX is defining the system boundaries and making sure that the data is collected and logged in a way that makes it easy to update and maintain over time for instance when repairs are carried out and components replaced.” “Systems like CDX add value by making it possible to track the materials and the liability”
- 53. What they toldus Tata Steel UK – Peter Hodgson “Steel recycling rates are already very high and the better the level of material segregation the easier it is to track and retain steel making alloys through recycling. Our focus is on what happens at the end of life and this includes designing for recovery, reuse and easier dismantling, for example with more bolts and less welding” Karin Oldenburg, BMW “Data from the IMDS* system helped us to track down and eliminate Chromium 6, it has helped in the reduction of lead, the identification plasticisers in materials and it is been essential in complying with REACH. ”It has also made our customs declarations easier and more efficient” *IMDS is the tracking and tracing system used in the European automotive industry
- 54. Appendix 3 Shipwaste streams research
- 55. What materials arein vessels? Background Steel forms approximately 75% to 85% of a vessel’s lightweight. While steel is the primary recoverable material when a ship is dismantled, it is the remaining materials which also have a huge impact at site level on: • Health and safety • The environment • The overall dismantling profitability. Vessel waste examples: • Medical waste • Asbestos containing materials • Chlorofluorocarbons • Cables • Waste oils & fuel • Contaminated water • Accumulators & batteries • WEEE • Paints
- 56. Research aims In orderto ascertain greater clarity on the materials within vessels, research has been carried out by the University of Strathclyde on the waste stream records of dismantled ships. What’s important about that? Through analysing the materials coming from dismantled ships the following benefits may be realised: • A greater understanding of the materials within vessels • The ability to model quantities of materials in existing ships • Contribution to closing the loop between dismantling/recycling and the design/build of vessels
- 57. Research Highlights What wedid In this study the waste streams of around 1000 vessels were analysed in order to present an overview of materials in end of life vessels What were the challenges? Due to data gaps and uncertainty it was only possible to investigate the following wastes: • Asbestos • Cables • Waste Fuel N.B. For all ships, new installation of materials which contain asbestos has been prohibited since 2002
- 58. Study Averages* 4,228 GT 6,614Kg Cables Recovered 835 Kg Asbestos Removed CARGO 150 Kg Waste Fuel & Oil 3,961 GT 6,984Kg Cables Recovered 1,003 Kg Asbestos Removed TANKER 114 Kg Waste Fuel & Oil 5,578 GT 10,593 Kg Cables Recovered 2,150 Kg Asbestos Removed RORO/ PASSENGER 142 Kg Waste Fuel & Oil *Average Values Calculated from Ship Recycling Waste Stream Data
- 59. Materials prediction In theinterim period before accurate and reliable tracking and tracing of materials is available, data of the actual material removed from vessels can be analysed and utilised to: • Increase recycling and reuse rates • Predict materials on-board • Provide feedback for ‘design for recycling’
- 60. University of Strathclyde Departmentof Naval Architecture and Marine Engineering NA-ME is assisting the SSI in the Closed Loop Materials Management workstream by providing knowledge and technical support on the practicalities of what happens to the materials used in a ships construction and operation at their end of life phase. This knowledge has been developed in part through NA-ME’s involvement in European Union funded research projects, where the potential impacts of ship recycling in relation to health, safety and the environment have been quantified in a scientific manner. NA-ME is currently developing vocational education and training for the ship recycling industry in the European Union funded Ship DIGEST project. www.shipdigest.eu www.strath.ac.uk/na-me Contact: [email protected] [email protected]
- 61. Appendix 4 RegulatoryContext
- 62. Hong Kong Convention(2009) • The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships was adopted by the International Maritime Organization (IMO) in 2009 • Once in force, ships over 500GT will be required to maintain an Inventory of Hazardous Materials (IHM) • An IHM is an inventory of the materials present in a ship’s structure, systems and equipment that may be hazardous to health or the environment • At the end of the ship’s life, the IHM will be used by an authorised recycling facility to develop a ship-specific recycling plan • Further details on the specific hazards and associated threshold values can be found on the IMO Website and in the Guidelines for the Development of the Inventory of Hazardous Materials (MEPC.197(62))
- 63. EU Ship RecyclingRegulation (2013) • The European Union institutions have agreed to EU legislation on ship recycling, though the details to be validated by the Council and Parliament – this is expected in late 2013 or early 2014 • The draft text indicates that the EU Regulation will: • Apply to ships between 2 to 5 years after the legislation enters into force • Require any ship entering a European port to maintain an IHM • Include an EU approved ship recycling facility list - the legislation currently calls for recycling to be carried out using fixed structures with impermeable floors and effective drainage systems
- 64. www.ssi2040.org Registered charity no: GB162 3473 19