Shipbreakers face surge in scrapping demand

The global shipping industry expects a surge of end-of-life vessels over the next decade, with up to 16,000 ships representing some 600 million deadweight tonnes slated for recycling. The challenge involves not only volume but also responsible handling, as ship recycling remains one of the most contentious aspects of maritime operations.

Steel recovery meets regulatory hurdles

Between 70% and 95% of a ship’s weight can be recovered as recycled steel, supporting circular economies and industrial decarbonization. The process, however, presents significant complications. Most end-of-life ships are dismantled on beaches in South Asia, where concerns about worker safety and environmental damage have dominated industry discussions for years.

Isabelle Radovan, policy advisor at Recycling Europe, stated the issue extends beyond maritime concerns. “Ship recycling can make a significant contribution to decarbonize the European steel sector,” she said at the 13th Ship Recycling Congress in Rotterdam this April. The timing is pressing, as recyclable steel from ships is set to increase, yet European recycling capacity remains underused.

The Hong Kong Convention (HKC) has created a new baseline for global ship recycling. European regulators are adopting a cautious approach before considering further legislative changes. Christelle Rousseau, a policy officer at the European Commission’s Directorate-General for Environment, confirmed no immediate plans exist to revise the EU Ship Recycling Regulation (SRR). Instead, Brussels will observe how the HKC is implemented worldwide and whether it raises standards.

Recent administrative changes aim to streamline compliance. Since February, shipowners can use a single inventory certificate and a single ready-for-recycling certificate to meet both SRR and HKC requirements. The EU also maintains a list of 41 approved recycling facilities—30 in Europe, 10 in Türkiye, and one in the U.S.—with enforcement becoming stricter. Illegal ship recycling under the SRR will soon become a criminal offense, punishable by up to 10 years in prison or fines of 5% of global annual turnover, capped at €40 million.

Radovan believes additional changes are necessary. She advocates expanding the regulation to cover military and publicly owned vessels, addressing reflagging before recycling, and ensuring consistent standards across all approved facilities.

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Capacity crunch and shifting markets

While regulators focus on rules, the industry faces a capacity challenge. Ship recycling volumes have fluctuated in recent years. In 2012, the combined length of dismantled ships reached 239 kilometers. By 2024, that number had dropped to 52 kilometers. Meanwhile, ships are staying in service longer, with the average age of scrapped vessels rising from 29 to 34 years due to stronger freight markets and shipowners’ reluctance to retire tonnage.

Gudrun Janssens of trade association Bimco noted the unpredictability. “Demand for ships continues to change year after year,” she said. “There is little consistency or predictability.” Strong market conditions have created a recycling backlog in several segments, with many vessels now operating well beyond 20 years.

For some shipowners, compliance marks only the beginning. Norwegian chemical tanker operator Odfjell has recycled five vessels in India since 2022, achieving a 99.6% material recovery rate without incidents. Oistein Jensen, the company’s vice president of sustainability, views the HKC as a minimum standard. “HKC is the floor, not the ceiling,” he said. Odfjell works with only five of the 128 yards in Alang, India, screening for corruption, legal history, sanctions, and environmental performance.

The company maintains oversight long after selling a ship, receiving weekly reports from yard personnel and independent supervisors on site. Jensen emphasized that ship recycling involves more than transactions. “There are people to consider,” he said.

Maria Joseph of the Sustainable Shipping Initiative highlighted the Mukadam system in Alang, where experienced supervisors mentor younger workers. One supervisor described the changes: “I watch everything, every man, every cut. I feel much safer now than I did then. And the workers under me, they are safer too.” While 115 of Alang’s 128 plots are now HKC-certified, Joseph warned that certification alone does not guarantee performance. “Leading facilities are operating well above the baseline,” she said.

Not all agree South Asia should remain central to the industry’s future. Benedetta Mantoan of the NGO Shipbreaking Platform argued Europe already has enough capacity to recycle all EU-flagged vessels and EU-owned ships sent to South Asian beaches in 2025. Her organization’s analysis suggested even large Panamax vessels could have been accommodated by approved European facilities. Still, she recognized the need for more capacity to handle the coming surge.

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The debate is moving from location to value creation. The Oppsirk project in Norway, led by Nordic Circles, aims to convert maritime steel into low-carbon construction materials, achieving over 90% CO₂ savings. Earlier this year, Nordic Circles partnered with Hoegh Autoliners to recycle up to eight ships in Norway, potentially saving 100,000 tonnes of emissions. Such initiatives could reposition ship recycling as a strategic source of low-carbon industrial materials rather than waste management.

Critics like the Shipbreaking Platform remain vocal about beaching practices. Some industry figures argue improvements over the past decade deserve recognition. Simon Bennett, sustainability adviser to India’s Priya Blue Group, believes significant changes occurred even before the HKC. “I hope the NGO will continue its campaigning role, where needed,” he said. “But I’d also like to see more recognition of the undoubted massive, and in many cases, voluntary and proactive action to change for the better.”

Bennett pointed out that the EU regulation covers only a fraction of global shipping. Lasting progress, he argued, depends on raising standards industry-wide, not just through European rules. He rejected binary assessments of safety. “We rarely live in a binary world,” he said. “There is no such thing as absolute safety. It’s a continuum.”

Priya Blue, which has scrapped 66 ships, reports a 98% material recovery rate and employs over 1,200 workers. The company holds two world records—for recycling the largest ship, the oil tanker Jahre Viking, and the longest, the passenger vessel SS Norway. Such achievements, Bennett noted, often get overshadowed by negative headlines. The industry’s progress, he argued, should be measured by whether standards keep improving—not just where ships are dismantled.

As the sector evolves, recycling markets face similar pressures to balance capacity with sustainability goals.