Environment Committee at the European Parliament approved a draft legislation that includes an EU fund to be financed by levies on all ships visiting EU ports, that would make scrapping ships in EU-approved facilities competitive. MEPs proposed that the scheme will be funded by a recycling levy, in line with the "polluter pays" principle.

The draft regulation that aims to reduce the adverse effects of careless scrapping, such as accidents, injuries or damage to human health or the environment, by ensuring that EU ships, and non-EU ships that have called regularly at EU ports, are scrapped in EU-approved facilities worldwide, was revised by MEPs at the Environment Committee. New rules for ship recycling and their dismantling were proposed by the European Commission in March 2012.

The law would apply to EU ships, but some of its provisions, including the recycling levy, would also apply to any ship calling at a port or anchorage of an EU member state. According to MEPs, member states would be required to ensure that an inventory of hazardous materials is established on board each EU ship. Non-EU ships entering a port or an anchorage of a member state would also have to have a hazardous materials inventory on board. If an inspection showed that the condition of ship does not comply with the inventory, penalties could be imposed.

MEPs also stressed that ships would be exempted from paying the recycling levy if their owners have deposited a financial guarantee to ensure that they use EU-listed facilities for recycling and treatment. Charging the levy on port calls would make it impossible to evade by "outflagging", i.e. re-registering a ship outside the EU. Penalties would be imposed on owners of EU ships that are sold and sent, within a twelve months of the sale, for recycling on a beach or in a facility not on the EU list.