- The Hong Kong Convention officially came into force on June 26, marking a major regulatory shift for global ship recycling.
- GMS highlights that compliance gaps in Bangladesh and Pakistan may limit ship recycling options in those regions.
- New HKC rules, along with U.S. economic factors, have contributed to a decline in the availability of recycling tonnage.
- Countries with established environmental enforcement, such as the U.S. and parts of Europe, may experience increased vessel arrivals.
The long-anticipated Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) officially came into effect on June 26, marking a significant milestone after what one dismantling firm describes as “decades of ongoing efforts.” Dubai-based GMS Leadership, a leading global buyer of ships for recycling, noted that while India has made substantial progress toward compliance, recycling yards in Bangladesh and Pakistan continue to face challenges in meeting the HKC standards. The company acknowledged the convention as a positive step forward but cautioned that the transition period could present regulatory hurdles and procedural complexities. GIE Media, Inc. reported this development.
HKC Impact Begins to Shift Ship Recycling Landscape
In its July 7 newsletter, GMS attributed the ongoing shortage of available recycling tonnage to several converging factors, including the recent enforcement of the Hong Kong Convention (HKC), the weakening U.S. dollar, and uncertain American trade policies. These developments have contributed to a slowdown in ship recycling activity across the Indian subcontinent.
According to GMS, around one-third of the region’s recycling yards are currently facing compliance issues related to the HKC, which limits options for both shipowners and cash buyers. With fewer approved destinations available, the convention may redirect a portion of obsolete vessels toward dismantlers in countries like the United States and those in Europe, where environmental standards have long been enforced.
GMS also noted that Pakistani authorities have begun issuing provisional import certificates only to recycling yards committed to HKC-compliant upgrades. Meanwhile, India showed some signs of activity, reporting at least one new vessel arrival in early July. Bangladesh has similarly taken a firm stance, stating it will not allow vessel imports to any yard lacking HKC approval.
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Source: GIE Media, Inc.
