Bangladesh Faces Compliance Crunch Ahead of Key Global Ship Recycling Regulation
May 7, 2025
With just over six weeks remaining until the enactment of one of the year’s most consequential shipping regulations, the global ship recycling industry is bracing for impact. But in Bangladesh—one of the world’s top destinations for dismantling end-of-life vessels—the sector appears worryingly underprepared.
On June 26, the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships officially enters into force. The landmark international agreement, adopted by the International Maritime Organization (IMO), aims to ensure that ships are recycled in a way that prioritizes human health, worker safety, and environmental protection. After years of anticipation and delays, the regulation will require all ship recycling facilities to meet strict standards—upending longstanding practices in many South Asian nations where most of the world’s ships are dismantled.
For Bangladesh, the implications are significant. The country is one of the “big three” in global ship recycling, alongside India and Pakistan. Its coastal yards, primarily in Chattogram, have long thrived on a booming industry, taking in hundreds of aging ships annually and providing thousands of jobs. But the new regulation is testing the limits of this model.
According to Clarksons Research, recyclers in Bangladesh have already begun lobbying for an extension to the compliance deadline, citing mounting challenges in upgrading their facilities to meet the new standards. Compounding the issue is a sluggish and opaque bureaucratic process. Recyclers complain that import clearances for vessels are still being processed on a case-by-case basis, creating backlogs and uncertainty that threaten to disrupt the flow of business.
The numbers speak volumes. According to GMS, the world’s largest cash buyer of ships for recycling, only seven yards in Bangladesh have so far received approval under the Hong Kong Convention’s guidelines. Another 20 are awaiting accreditation, but with the deadline fast approaching, time is rapidly running out.
Meanwhile, vessels destined for Bangladeshi yards are facing increasing delays. Wirana, another leading cash buyer, reports that up to 10 ships are currently idling in Bangladeshi waters, stuck in limbo as they await permission to be dismantled. With uncertainty hanging over the approval process, shipowners are beginning to divert recycling candidates elsewhere.
“There’s a clear shift happening,” said a senior executive at Wirana. “Some ships that were strong candidates for Bangladesh have now been sold to Indian yards instead. Owners can’t afford to wait in uncertainty when other markets are ready and compliant.”
India, by contrast, appears better positioned for the transition. The country has made notable strides in modernizing its ship recycling industry, with many of its yards already certified under the Hong Kong Convention. This has allowed it to capitalize on the delays facing its regional rivals, attracting more tonnage and consolidating its position in the global market.
For Bangladesh, the consequences of inaction could be steep. The ship recycling industry is a critical economic pillar, contributing significantly to GDP and employing an estimated 30,000 workers directly. A slowdown—or worse, a regulatory shutdown—would ripple through the local economy and labor market.
Industry experts argue that a coordinated response is essential. Without streamlined import procedures and clearer government support, Bangladesh risks being sidelined in a post-Hong Kong Convention world. “We need a national action plan—urgently,” said a shipbreaking association representative. “Otherwise, we’ll miss this critical transition and lose our competitive edge.”
As the June 26 deadline looms, all eyes are on Bangladesh. The coming weeks will determine whether one of the world’s ship recycling giants can rise to meet the new global standards—or be left behind.
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