Stricter Environmental Rules to Drive Surge in Ship Recycling Over the Next Decade: Bimco Predicts
Over the next decade, tighter environmental regulations are expected to lead to a significant increase in the number of vessels being scrapped, with estimates suggesting a more than 100% rise in ships sent to the breakers. This prediction comes from data analyzed by Bimco, one of the largest international shipping associations, which has used historical demolition data combined with information on new shipbuilding to forecast future trends in vessel recycling.
Gudrun Janssens, Bimco’s EU representative, revealed these findings at the Global Maritime Environmental Congress (GMEC) held during the SMM trade fair in Hamburg. According to Bimco’s algorithm, over 15,000 ships will be sent for recycling in the next ten years. The key drivers of this increase are new environmental regulations, particularly the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HK Convention), which comes into effect next year, and the Basel Convention, which regulates the movement of hazardous waste across borders.
The HK Convention mandates that all ships must have an Inventory of Hazardous Materials (IHM) by June of the following year. The IHM will catalog all hazardous substances onboard, ensuring that vessels are dismantled in an environmentally safe manner. This requirement is critical for the future of ship recycling, as it helps ensure that potentially harmful materials are handled responsibly. The Basel Convention, in force since 1992, will continue to play a role in controlling the cross-border movement of hazardous materials, which includes materials from ships being scrapped.
Janssens emphasized the role of sustainable ship recycling in fostering a circular economy, where materials from decommissioned vessels are reused or repurposed, thereby contributing to a resource-efficient global economy. “Through the adoption of a sustainable demolition system, the maritime industry can contribute significantly to this circular economy,” she said.
Currently, most ship recycling focuses on the vessel’s steel structure, which represents a major portion of the ship’s material. However, Janssens highlighted that further considerations are needed to include the different grades of steel and other metals in the Inventory of Hazardous Materials. This would enable the reuse of these metals, rather than simply down-cycling them into less valuable products. She noted that adjusting the IHM to capture the full range of reusable materials is a critical next step.
Henning Prinzen, a trader at Global Marketing Systems (GMS), a major player in the ship demolition market, acknowledged that around 80% of a vessel can currently be recycled. He explained that ship recyclers attempt to reuse not only the steel but also equipment, furniture, and other onboard appliances. However, Prinzen admitted that some ship components inevitably end up as waste. “You have to accept that some parts cannot be reused or recycled, and that there will always be some waste,” he said.
Despite the progress in sustainable ship recycling, Janssens acknowledged that there are still challenges in ensuring compliance with international regulations. Bimco is currently revising its recycling contract, known as Recyclecon, to align with the HK Convention. However, she noted that many shipowners are not yet selling vessels in compliance with the convention, indicating the need for more work in this area. “We need to do more work on this,” she added.
One of the key issues raised was the existence of shipowners who attempt to evade environmental regulations. Prinzen noted that there will always be “dodgy guys” trying to bypass the rules. To combat this, Janssens highlighted the inclusion of the “No More Favourable” clause within the HK Convention. This clause ensures that even if a ship is flagged in a country that is not a signatory to the convention, it must still be recycled under the same strict environmental standards as those of a signatory country. “All the major ship recycling yards are signed up to the convention, so all ships will be recycled under it, unless you can find the 1% of yards that are not signatories,” she said, adding that this is a “very strong measure to avoid leakage.”
Looking ahead, shipbreaking yards are expected to see increased demand as the number of newbuild ships continues to rise and the average age of vessels increases. This will lead to more ships being dismantled as they reach the end of their operational lives. “There will be a marked growth in vessel demolition eventually,” Janssens asserted.
However, Janssens also pointed out that while the maritime sector is heavily focused on retraining crews to manage new fuels and advanced digital technologies, it is equally important to ensure adequate training for workers in shipbreaking yards. These workers often face hazardous conditions, making shipbreaking one of the most dangerous jobs in the world. “There is going to be a need for greater training for those working in breakers yards,” she said.
Janssens further emphasized that the costs associated with ship recycling—including labor, environmental protection, and any external costs—should be factored into the price that shipowners receive when selling their vessels for scrap. This would create a business case for ship recycling, allowing market forces to drive the process. “Then it’s a business case and it can be driven by the market,” she explained.
The increasing environmental regulations and the growth in vessel demolition represent both a challenge and an opportunity for the maritime industry. By adopting sustainable recycling practices and ensuring compliance with international conventions, the industry can contribute to a more resource-efficient global economy while also mitigating the environmental impact of shipbreaking. With the HK Convention coming into force and the shipbreaking sector expected to grow significantly, the future of maritime recycling looks set to be a critical component of the broader effort to create a sustainable global economy.
