Bangladesh’s Banks Urged to Support Greener Ship Recycling Industry
Bangladesh, a major player in global ship recycling, is looking to its banking sector to play a key role in making the industry more environmentally friendly and sustainable. A recent summit held in Chattogram (July 3-4, 2024) by the International Maritime Organization’s (IMO) Safe and Environmentally Sound Ship Recycling (SENSREC) Project brought together key stakeholders to discuss how financial institutions can contribute to this goal.
The summit highlighted the potential of ship recycling to be both economically beneficial and environmentally responsible. Up to 96% of a ship’s materials can be reused or recycled at the end of its operational life. This not only provides valuable resources but also helps reduce the carbon footprint of steel production, a major contributor to greenhouse gas emissions.
Bangladesh has made significant strides in improving safety and environmental practices in its ship recycling yards since the early 2000s, with support from the SENSREC project. Some yards have become models for environmentally sound practices. However, challenges remain in ensuring these best practices are adopted throughout the industry.
The summit brought together representatives from banks and financial institutions, ship recycling companies, classification societies (organizations that ensure ships meet international safety standards), government officials, and ship owners and operators. A key focus of the discussions was the financial hurdles ship recycling yards faced when upgrading their infrastructure. Modernizing facilities is crucial for implementing environmentally sound practices, meeting operational safety standards, and properly training workers.
The summit participants explored various financial products that could help support investment in these upgrades. Options discussed included soft loans backed by the Central Bank, equity investments, and involvement from private lenders.
To address these challenges and explore potential solutions, the summit brought together key stakeholders. Representatives from Bangladesh’s banking and finance sector participated alongside ship recycling companies, classification societies (organizations that verify the safety and quality of ships), government officials, and ship owners and operators.
One of the main hurdles identified was the significant financial burden associated with upgrading infrastructure at recycling yards. This lack of funding hinders the implementation of environmentally sound practices, achieving operational safety standards, and providing proper training for the workforce.
A crucial element of the summit was a visit to leading recycling yards in Chattogram, where participants could see firsthand the ongoing efforts to modernize facilities.
The event was opened by high-level dignitaries, including the Senior Secretary of Bangladesh’s Ministry of Industries, the Norwegian Ambassador, and the United Nations Resident Coordinator. This level of participation underscores the importance placed on achieving a sustainable and responsible ship recycling industry in Bangladesh.
In conclusion, the summit highlighted the potential for Bangladesh’s banking sector to play a critical role in transforming the country’s ship recycling industry into a leader in environmental responsibility. By providing financial support for infrastructure upgrades, banks can help ensure that Bangladesh remains a major player in the global ship recycling market while also contributing to a cleaner and more sustainable future.
