S&P Global Commodity Insights reports that Ellie Besley-Gould, CEO of the Sustainable Shipping Initiative (SSI), views steel circularity as a major opportunity for decarbonising shipping—one that goes beyond just fuel.
Steel’s Role in the Shipping Carbon Footprint
According to Besley-Gould, steel remains one of the most carbon-intensive inputs in shipbuilding and operations, accounting for 70–90% of a vessel’s mass. As she explains, a significant portion of a ship’s Scope 3 emissions originates from steel extraction, manufacturing and end-of-life, making circular steel management an essential climate lever.
She notes that as the fleet ages, approximately 150 million metric tonnes of ship steel could become available for recycling by 2032—presenting a tangible, near-term opportunity to close the loop on carbon.
Recycling and Low-Carbon Steel: Key Decarbonisation Levers
Besley-Gould highlights that recycling ship steel into electric arc furnaces (EAFs) can reduce life-cycle CO₂ emissions by up to 90%, compared to making fresh steel from iron ore.
But today, most ship steel ends up “downcycled” into lower-quality applications; less than 10% is reused in high-grade or low-carbon steelmaking routes, she says.
One core challenge, she points out, is timing: decisions on recycling often come only when a ship nears its end of life, at which point owners may see scrap as a cost rather than a resource. She advocates for midlife recycling, when owners can make choices to preserve the value and quality of the steel return.
Besley-Gould argues that circularity must be embedded throughout a ship’s lifecycle—from initial design through operation and eventual recycling—not just at the point of dismantling.
Policy, Coordination & the Global Landscape
To make this vision viable, she emphasises the need for cross-sector collaboration between shipping, steel, regulators and financial institutions. Effective recycling infrastructure, de-risking policies, and demand-generation tools—especially for green steel —are key to making circularity scalable.
Besley-Gould also welcomed the impact of the Hong Kong Convention, now entering into force in 2025, arguing it provides a more robust global standard for ship recycling and helps underwrite investment in upgraded shipbreaking capacity.
Broader Sustainability Work & Net-Zero Navigation
Beyond steel, SSI’s roadmap (which spans oceans, people, community, finance, transparency and energy) also prioritises marine biodiversity, crew welfare, and operational efficiency. Topics under discussion include how slow steaming could reduce both emissions and underwater noise, as well as how human welfare can scale alongside technical decarbonisation.
Besley-Gould expressed disappointment at the delay in ratifying the IMO Net-Zero Framework, but reaffirmed the opportunity for shipping to become a “transformative” industry. She said SSI continues to work with its members on exploring alternative fuels—such as ammonia, methanol, LNG, bio-fuels—while also pushing for efficiency gains through measures like wind-assist, hull coatings, and slow steaming.
She pointed out that green and digital shipping corridors, like the one between Singapore and Long Beach, offer promising models not just for fuel transition but for embedding environmental and social co-benefits.
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Source: S&P Global Commodity Insights
