The Evolving Landscape of Ship Recycling Regulation: Industry at the Crossroads of Reform and Complexity
London | 10 July 2025
The ship recycling sector — once operating in the margins of maritime awareness — has emerged as a central topic in global shipping, policy-making, and ESG (Environmental, Social, and Governance) frameworks. Traditionally referred to as “ship breaking,” the dismantling of end-of-life vessels was long seen as a necessary but unglamorous end to the shipping lifecycle. Now, amid rising decarbonisation pressures, social scrutiny, and regulatory tightening, ship recycling is no longer an afterthought — it is a high-stakes decision with significant environmental, legal, and reputational implications.
On 26 June 2025, a major regulatory milestone was reached with the enforcement of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC). Spearheaded by the International Maritime Organization (IMO), the HKC aims to create a global standard for ship recycling. Significantly, the world’s primary ship recycling nations — India, Bangladesh, Pakistan, and Turkey — are all signatories, lending much-needed weight and credibility to the convention.
Under the HKC, vessels intended for recycling must maintain an Inventory of Hazardous Materials (IHM), which is verified before an International IHM Certificate is granted. Once a ship is deemed ready for dismantling, it receives an International Ready for Recycling Certificate, enabling it to be sent to an authorised recycling yard that adheres to a ship-specific recycling plan.
The entry into force of the HKC is heralded by many as a breakthrough — a long-awaited global benchmark for safety and environmental responsibility in ship recycling. However, its arrival has also reignited debates over its limitations and omissions.
Critics argue the HKC is outdated, having been drafted between 2006 and 2009, and fails to meet the rising environmental and labor protection standards of today. Most notably, the convention does not ban the controversial “beaching” method used extensively in South Asia, where vessels are driven onto tidal flats for dismantling — a method decried by environmental and labor groups for its hazardous conditions.
Other criticisms include insufficient downstream waste management provisions and inadequate worker safety mechanisms. Proponents counter that the HKC was never intended to address downstream waste or labor conditions in full, as these are within the remit of other international frameworks: the Basel Convention covers hazardous waste movement and disposal, while International Labour Organization (ILO) conventions govern working conditions.
While the HKC aspires to global harmonization, it operates in parallel — and sometimes in conflict — with the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal. In effect since 1992, the Basel Convention was not specifically designed for ship recycling, yet it has come to play a dominant role in regulating end-of-life vessels, particularly following the adoption of the Ban Amendment in 2019.
This amendment prohibits OECD countries, including all EU member states, from exporting hazardous waste (including ships destined for scrap) to non-OECD countries — which notably includes India, Pakistan, and Bangladesh, the very countries that dominate the ship recycling market due to their competitive pricing.
Within the European Union, these Basel rules are enforced through the European Waste Shipment Regulation (EU WSR), which applies to any ship — regardless of flag — departing EU waters for recycling. As such, even non-EU flagged vessels can find themselves subject to EU laws if they are situated within EU jurisdiction at the time of decommissioning.
Adding yet another layer, the EU Ship Recycling Regulation (EU SRR) was adopted in 2013, ahead of the HKC, and mirrors many of its provisions while going slightly further. The EU SRR requires all EU-flagged ships to be recycled only in facilities included in the European List of approved ship recycling yards, which excludes all South Asian yards due to their non-OECD status.
While some Turkish yards are approved, the European List lacks sufficient capacity to accommodate the large number of EU-flagged ships reaching end-of-life. Compounding the issue, shipowners can avoid these rules by reflagging their ships outside the EU before they are designated for recycling — a loophole that undermines the regulation’s intent.
Despite this workaround, there have been successful prosecutions within the EU against parties who circumvented or violated the Waste Shipment Regulation, signaling increased enforcement vigilance.
At the heart of the ongoing confusion is the absence of formal recognition of equivalency between the HKC and the Basel Convention. Under the Vienna Convention on the Law of Treaties, newer treaties may take precedence if they address the same subject matter, but in this case, equivalency has not yet been agreed upon by the Conference of the Parties (COP) to the Basel Convention.
A 2011 attempt to secure this recognition failed, and the issue is not expected to be reconsidered before 2027. Without this designation, the Basel framework continues to override or complicate the implementation of the HKC, especially for countries like those in the EU that are bound by the Ban Amendment.
This creates a situation where modernised, HKC-compliant yards in South Asia — which have invested heavily in upgrades and third-party certifications — remain excluded from EU-approved lists, not for lack of compliance, but for legal and political reasons.
For shipowners, the current regulatory environment is a minefield. Even preliminary discussions with brokers about ship disposal can render a vessel legally defined as “waste,” triggering the regulatory obligations of the Basel and EU frameworks. Regulatory agencies and NGOs are watching closely, and non-compliance risks criminal charges, reputational damage, and financial penalties.
Despite the legal uncertainty, the demand for sustainable and responsible ship recycling continues to grow, driven by ESG commitments, investor expectations, and rising public awareness. There is now a clear call within the maritime industry for the HKC to be recognised as equivalent to the Basel Convention, which would enable the inclusion of HKC-compliant South Asian yards in EU processes and allow for a more streamlined, global approach to ship recycling.
Until such equivalency is formally recognised and regulations are harmonised, shipowners and operators must navigate with caution. Each decision regarding end-of-life vessels — from the timing of sale to the choice of flag and destination — carries significant regulatory consequences.
The road to a clear, consistent, and fair ship recycling framework remains long, but the entry into force of the Hong Kong Convention marks a crucial turning point. What remains now is for the international community to build upon this foundation, close the loopholes, and finally deliver a unified global regime that safeguards people, protects the environment, and offers certainty to the industry.
Until then, caution and due diligence remain the watchwords for all involved.
