Global Ship Recycling Poised for Record Surge as Hong Kong Convention Takes Effect: BIMCO Forecasts 16,000 Ships to Be Recycled in Next Decade
July 3, 2025
With the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) officially entering into force this week, the global ship recycling industry stands on the threshold of a historic transformation. The latest projections from BIMCO, the world’s largest international shipping association, suggest that up to 16,000 ships—amounting to a staggering 700 million deadweight tons (DWT)—could be dismantled and recycled over the next 10 years.
This figure represents a seismic shift in maritime lifecycle trends: a doubling of the number of ships recycled and nearly triple the tonnage compared to the last decade. The confluence of regulatory enforcement, fleet aging, and decarbonization pressures is poised to redefine the contours of ship recycling, placing unprecedented demands on global recycling capacity—especially in South Asia, where most of the world’s shipbreaking occurs.
HKC: A New Era in Sustainable Ship Recycling
The entry into force of the HKC on June 30, 2025, marks a watershed moment in maritime regulation. Initially adopted by the International Maritime Organization (IMO) in 2009, the convention aims to ensure that ships, when being recycled after reaching the end of their operational lives, do not pose unnecessary risks to human health, safety, or the environment. It establishes mandatory standards for ship design, construction, operation, and preparation to facilitate safe and environmentally sound recycling.
The convention’s long-awaited implementation brings binding global standards to a sector long criticized for its unsafe and polluting practices, especially in the shipbreaking beaches of South Asia.
BIMCO’s Forecast: A Massive Recycling Wave Ahead
In a detailed analysis released by BIMCO following the HKC’s enforcement, Chief Shipping Analyst Niels Rasmussen projected a dramatic uptick in ship recycling volumes. According to Rasmussen:
“The wave of recycling we expect is unlike anything the industry has seen before. The ships built in the early 2000s are rapidly approaching their end-of-life phase, and with environmental regulations tightening and green compliance becoming essential, owners are increasingly likely to retire older vessels rather than retrofit them.”
The BIMCO report highlights several key insights:
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Vessels Built in the 2000s Dominate the Future Supply Pool: These ships were constructed during a time of high ordering activity and now form a significant part of the global fleet. Yet only 3% of them have been recycled so far, leaving a massive backlog poised for retirement.
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Bulkers, Tankers, and Container Ships Will Lead in DWT Terms: Though these three categories will comprise only 53% of ships recycled, they will account for a whopping 91% of the total DWT. This reflects their large individual size and dominant role in global trade.
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General Cargo and Fishing Vessels Still Count: While often smaller in scale, these vessel types still represent a substantial portion of ship counts and will continue to play a significant role in recycling activity.
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South Asia Remains the World’s Recycling Powerhouse: India, Bangladesh, and Pakistan have collectively handled 86% of DWT recycled since 2015. Despite growing interest in cleaner methods elsewhere, these countries retain dominance due to capacity, labor availability, and established infrastructure.
Implications for Global Recycling Capacity
If BIMCO’s projections materialize, annual recycling volumes could soon eclipse the all-time high recorded in 2012, when around 70 million DWT was recycled. Rasmussen estimates that this threshold could be surpassed by 2027, underscoring the urgency for investment in compliant, environmentally sound facilities.
“The message is clear,” Rasmussen emphasized. “Green, compliant recycling capacity must scale up rapidly. The industry cannot afford to repeat the mistakes of the past. Without sustainable infrastructure and robust regulation enforcement, we risk turning this opportunity into a crisis.”
India, for instance, has already taken significant steps to align with the HKC. Over 90 of its recycling yards—primarily located in Alang—are certified for HKC compliance. Bangladesh and Pakistan have also shown progress but face challenges related to enforcement, labor conditions, and environmental safeguards.
Regulatory Push Meets Market Realities
While the HKC provides the legal and operational framework, its impact will ultimately be shaped by market forces. Currently, the global shipping industry is still benefitting from relatively strong freight rates in key sectors like dry bulk and tankers. These favorable market conditions could delay some scrapping decisions, as older ships continue to generate revenue.
However, decarbonization regulations—such as the IMO’s Carbon Intensity Indicator (CII) and the EU’s Emissions Trading Scheme (ETS)—are expected to exert growing pressure on shipowners. Older vessels with poor fuel efficiency and high emissions profiles may find it increasingly difficult to compete or trade in regulated markets, accelerating their retirement.
Rasmussen explained:
“We anticipate two counterbalancing forces. Market strength may slow the pace of scrapping in the short term, but the push for decarbonization will likely accelerate it over the medium term. Ultimately, the regulatory tide will win.”
Challenges and Opportunities for South Asia
The surge in expected ship recycling presents both an opportunity and a test for South Asian recycling hubs. These nations must now balance commercial volume with compliance mandates, improving safety, environmental management, and labor welfare in a traditionally hazardous industry.
Alang, India’s leading ship recycling center, has emerged as a leader in HKC-aligned operations. In 2024, the Indian government launched a national campaign to upgrade infrastructure, provide worker training, and enhance environmental monitoring. Bangladesh’s efforts under the EU-funded SENSREC program, and Pakistan’s recent partnership with the International Labour Organization (ILO), signal a broader shift toward sustainable practices.
Still, challenges remain:
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Labor Safety: Ensuring proper training, protective equipment, and healthcare access for workers remains critical.
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Waste Management: Handling hazardous materials like asbestos, PCBs, and residual fuels must meet international standards.
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Certification and Auditing: Yard certification must be backed by rigorous, transparent auditing systems to build global trust.
Industry Response and Alignment
Shipowners, classification societies, and flag states are also preparing for the new era. Leading classification societies like DNV, Lloyd’s Register, and ClassNK are expanding their offerings to support HKC-compliant recycling planning. Shipowners are now mandated to maintain updated Inventory of Hazardous Materials (IHM) records, ensuring traceability of toxic substances onboard vessels.
Moreover, several ship finance institutions and cargo charterers have begun demanding proof of sustainable recycling as part of their Environmental, Social, and Governance (ESG) criteria. This trend is pushing the industry to see recycling not merely as an end-of-life necessity but as a reputational and financial imperative.
A Decade of Reckoning—and Opportunity
As the ship recycling sector enters this pivotal decade, the stakes have never been higher. The choices made today—by governments, yards, shipowners, and regulators—will determine whether the surge in ship recycling translates into a global environmental success story or becomes a repeat of the past’s worst excesses.
What’s clear is that the scale of the coming recycling wave will reshape maritime logistics, environmental policy, and labor practices worldwide. From retrofitting yards and scaling training programs to leveraging digital monitoring tools, the industry must act quickly and decisively.
Rasmussen concluded:
“The next 10 years will be transformative. Recycling will no longer be a niche afterthought—it will be central to how the world thinks about maritime sustainability. We must rise to meet that challenge.”
Key Takeaways:
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16,000 ships / 700 million DWT projected for recycling from 2025–2035.
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Bulkers, tankers, and container ships will dominate by weight; general cargo and fishing vessels still numerous.
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South Asia expected to remain dominant, with urgent need to expand HKC-compliant capacity.
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Decarbonization regulations could accelerate scrapping, despite current market strength.
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Annual recycled tonnage may surpass the 2012 peak by 2027.
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Industry stakeholders must act fast to ensure safe, green, and economically viable ship recycling.
As HKC enforcement begins a new era, the global ship recycling sector stands at a historic crossroads—facing its biggest challenge yet, and its greatest opportunity.
