Ship Recycling: Challenges and Developments in the Last 5 Years
06 November 2024 by Al Mar’atul Hamidah
Ships during Construction on Shipyard (2024). Photo: Paul via Pexels.com
Ship recycling is the process of dismantling ships that have reached the end of their service life to recover reusable materials such as steel, aluminum, and electronic components. The goal of this process is to reduce environmental impact and improve resource utilization efficiency. In the last five years, the focus on ship recycling has increased due to the growing number of ships ready for recycling and the tightening of regulations related to safety and environmental standards.
Global Regulatory and Standards Developments
In terms of regulation, various initiatives have been introduced to ensure that the process is carried out safely for workers and in an environmentally friendly manner. One key international agreement is the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), which was ratified and set to come into force in June 2023. This convention sets global standards for the management of hazardous waste and worker protection at these facilities.
In addition, the European Union adopted the EU Ship Recycling Regulation in 2013, which came into effect at the end of 2018. This regulation mandates that EU-flagged ships must be recycled at facilities listed in the European List of approved recycling facilities. This regulation goes beyond the Hong Kong Convention by adding stricter safety and environmental standards, including rigorous oversight by national authorities and the European Commission.
Global Capacity and Capacity Challenges
A major challenge in ship recycling is the capacity of recycling facilities to meet the growing demand. According to BIMCO, it is estimated that 15,000 ships will be recycled in the next decade, accounting for about 12.5% of the global fleet. With more than 50% of the world’s ships being over 15 years old, the need for adequate recycling facilities has become increasingly urgent.
In the South Asian subcontinent, which includes India, Bangladesh, and Pakistan, the dominance of the industry is evident, with large capacities available. Alang, India, is the world’s largest ship recycling center, with 131 operational yards capable of handling 4.5 million tons of displacement annually. Bangladesh, though smaller than India, plays an important role in the steel industry by utilizing steel from recycled ships. In Pakistan, although the facilities are not as large as in India and Bangladesh, reforms to safety and environmental standards continue to be implemented at locations like Gadani.
Alang Ship Breaking Yard. Photo: Kairi Aun/Alamy Stock Photo
Environmental and Social Impact
Ship recycling not only generates economic benefits through the reuse of steel and other valuable materials, but it also has negative impacts that need to be managed. Hazardous waste such as asbestos, PCBs, and oil poses a major threat to the environment and human health if not properly handled. Therefore, regulations such as the Basel Convention have been adopted to control the movement of hazardous waste between countries. The Ban Amendment of this convention, which came into force in 2019, prohibits the export of hazardous waste from OECD countries and the European Union to developing countries, which often serve as destinations for recycling.
The Future of Ship Recycling
In the last five years, the focus on ship recycling has come not only from governments and regulators but also from the private sector. Initiatives like the Responsible Ship Recycling Standards (RSRS), introduced by major financial institutions, aim to promote socially and environmentally responsible. Additionally, the emergence of digital platforms such as the Ship Recycling Portal is expected to facilitate the buying and selling of ships for recycling purposes.
Looking ahead, the rapid growth of the global fleet and increasing awareness of sustainability will drive the expansion of capacity and standards at these facilities. Countries like India plan to increase their recycling capacity to meet the growing global demand. With the Hong Kong Convention coming into force in 2023, the hope for more uniform global standards in ship recycling is growing.
Ship Recycling in Indonesia
Indonesia, although not as large as India or Bangladesh in the ship recycling industry, plays a significant role in Southeast Asia. The ship recycling industry in Indonesia is mostly concentrated in Batam and several areas around the Riau Islands, located near busy international shipping lanes. The ship recycling industry in Indonesia has great potential in terms of utilizing scrap steel that can be reused in domestic industries. Steel from these recycled ships can be used for infrastructure development. However, this sector still needs to improve worker safety standards and strengthen environmental regulations.
Indonesian government has started paying more attention to the development of a more sustainable ship recycling sector. Several policies related to the management of hazardous waste from ships have already been implemented through national regulations, although much remains to be done to align with international standards.