The ship recycling industry has long been associated with environmental and safety concerns, especially in major hubs like South Asia and Türkiye. However, June 26, 2025, marked a turning point with the enforcement of the Hong Kong Convention—a landmark international agreement aimed at ensuring the safe and environmentally sound recycling of ships.
Lloyd’s List markets editor Rob Willmington explored this game-changing development and its implications for shipowners and recyclers, especially after years of minimal recycling due to booming shipping markets.
The Significance of the Hong Kong Convention
The Hong Kong Convention, formally known as the International Convention for the Safe and Environmentally Sound Recycling of Ships, sets global standards for the entire lifecycle of ship recycling—from design to dismantling. Rob Willmington spoke with key stakeholders, including Anil Sharma (GMS), Tone Knudsen Fiskeseth (DNV), Nikos Mikelis (BIMCO), and Hitesh Vyas (Wirana), who agreed that the Convention brings long-awaited clarity and accountability to an often-criticized industry.
Experts emphasized that the Convention now requires shipowners to ensure vessels carry an Inventory of Hazardous Materials (IHM), and recycling yards must meet strict compliance standards. This is a big step forward for both worker safety and environmental protection, especially in countries where beaching practices have historically caused harm.
Market Readiness and Future Recycling Activity
Despite the regulatory progress, a key question remains: is the industry ready to scale up sustainable recycling? After nearly three years of low recycling activity due to high freight rates and strong ship earnings, many older vessels are still in operation. However, as market conditions shift and profitability declines, stakeholders expect a surge in ship retirements—possibly starting in 2025 or 2026.
Anil Sharma from GMS noted that compliant yards, especially those already certified by independent agencies, are better positioned to attract tonnage. Meanwhile, Tone Knudsen Fiskeseth emphasized that shipowners need to integrate recycling planning into vessel design and lifecycle strategies. The industry is cautiously optimistic, but challenges in enforcement, infrastructure, and cost remain.
The entry into force of the Hong Kong Convention marks a critical shift toward a more sustainable and responsible ship recycling sector. While the industry still has work to do to meet the Convention’s requirements fully, the groundwork has been laid for a safer, greener future. As older ships eventually re-enter the recycling stream, this legislation ensures that their final voyage does not come at the cost of human lives or the environment.
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Source: Lloyd’s List
