Bangladesh Ship-Breaking Industry Must Be Environmentally-Friendly
By Dr. Nasim Ahmed
The ship-breaking industry plays a crucial role in Bangladesh’s economy, contributing an estimated Tk. 30,000 crore. Generating approximately Tk. 1,500 crore annually in government revenue, it is a significant global player, processing about 38% of the world’s recycled ships. This sector provides essential steel resources, supplying 80-90% of the nation’s steel demand and reducing reliance on imports, which supports various industries, including construction and infrastructure development.
Furthermore, the industry is a vital source of employment, directly engaging around 200,000 workers and indirectly supporting over a million people. The ship-breaking yards in Chattogram, particularly along the Sitakunda coastline, form the backbone of this industry, making Bangladesh a dominant force in global ship recycling.
Challenges Facing the Ship-Breaking Industry
Despite its economic significance, the ship-breaking industry has experienced a decline in activity. In 2024, only 144 ships, totalling approximately 968,000 Gross Tons (GT), were dismantled—a stark contrast to 2021, when 280 ships amounting to 2.73 million GT were processed. This represents the lowest import volume since 2005, raising concerns about the industry’s sustainability.
Several factors contribute to this decline, including the global economic downturn, the COVID-19 pandemic, and geopolitical tensions such as the Russia-Ukraine war. These factors have disrupted supply chains, reduced the availability of end-of-life ships, and increased operational costs. Moreover, a dollar crisis and high international ship prices have made it difficult for local recyclers to procure vessels, leading to a significant drop in imports.
Future Prospects and Growth Potential
Despite these challenges, the future of Bangladesh’s ship-breaking industry remains promising. The global ship recycling market is expected to grow significantly, with Bangladesh’s market projected to reach a valuation of $20 million by 2032, exhibiting a Compound Annual Growth Rate (CAGR) of 9.48%. The global market itself is projected to reach $11.5 billion by 2028, growing at a CAGR of 3.7%.
Bangladesh’s competitive labor costs and established infrastructure position it well to capitalize on this growth. However, to remain competitive, the industry must address several pressing issues, including environmental concerns, worker safety, and compliance with international regulations.
Environmental and Safety Concerns
The ship-breaking industry has long been criticized for its environmental and health impacts. The dismantling process often releases hazardous substances, including asbestos, heavy metals, and Persistent Organic Pollutants (POPs), contaminating soil and water. Additionally, worker safety remains a major concern, with inadequate protective measures leading to frequent accidents and long-term health issues.
The upcoming enforcement of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) in June 2025 presents a significant challenge. Bangladesh has made slow progress in upgrading its facilities to meet HKC standards, with only five green-certified yards developed over the past decade. In contrast, India has significantly outpaced Bangladesh by establishing 120 green yards, posing a threat to Bangladesh’s competitive edge in the industry.
Strategies for Sustainable Growth
To ensure the sustainability and growth of the ship-breaking industry, a multifaceted approach is required. Key strategies include:
- Investment in Green Infrastructure: Upgrading existing facilities to comply with HKC standards is imperative. The government should facilitate access to funding and technical expertise to develop green-certified yards in collaboration with industry stakeholders. Environmentally friendly technologies and best practices must be integrated into the sector to minimize pollution and improve worker safety.
- Strengthening Regulatory Frameworks: Robust regulations prioritizing environmental protection and worker safety must be implemented and strictly enforced. Regular monitoring, coupled with stringent penalties for non-compliance, can help improve industry standards and ensure sustainability.
- Enhancing Worker Training and Safety: Providing comprehensive training programs on safe dismantling practices and proper handling of hazardous materials can reduce workplace accidents and long-term health risks. The industry must also invest in personal protective equipment (PPE) and emergency response mechanisms to enhance worker safety.
- Diversifying Economic Activities: Promoting alternative industries in coastal regions can mitigate economic vulnerabilities. Encouraging the development of sectors such as shipbuilding, tourism, and fisheries can provide additional employment opportunities and financial resilience, reducing dependency on ship recycling alone.
- International Collaboration and Support: Engaging with international organizations and neighboring countries can facilitate knowledge exchange and access to best practices. Collaborative efforts can attract foreign investment and technical assistance to modernize the industry, ensuring long-term competitiveness.
Government Initiatives and Policy Reforms
The government of Bangladesh has undertaken several initiatives to regulate and promote the industry, aligning it with international standards. In February 2025, draft amendments to the nation’s ship recycling and hazardous waste management laws were introduced. These amendments aim to enhance environmental sustainability and worker safety, in compliance with the HKC.
Additionally, the Bangladesh Ship Recycling Act 2018 was amended, setting a target to comply with the HKC by 2023. While progress has been slow, ongoing efforts are focused on strengthening safety protocols, improving waste management practices, and encouraging the adoption of environmentally friendly recycling methods.
Bangladesh’s ship-breaking industry remains a key pillar of the national economy, providing employment and supporting various sectors with recycled steel. However, addressing environmental and safety concerns is crucial for its sustainable growth. By investing in green infrastructure, strengthening regulations, enhancing worker training, diversifying economic activities, and fostering international collaborations, Bangladesh can position itself as a global leader in environmentally responsible ship recycling.
The industry’s future remains promising, with projected growth driven by rising steel demand and infrastructure development. A balanced approach that prioritizes both economic benefits and environmental stewardship will be essential in ensuring long-term sustainability and competitiveness on the global stage.
The writer is an Additional Secretary, the Public Security Division, Ministry of Home Affairs.
