As recycling volumes increase, it is increasingly important that the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is ratified and implemented. The Convention was adopted in 2009 with the aim of reducing risks to human health, safety, and the environment.
Electric Arc Furnaces
In fact, recycling steel in electric arc furnaces emits significantly less greenhouse gases than the production of crude steel, and as the electricity grid becomes decarbonized emissions will reduce further. Therefore, ship recycling can continue to play a key role in the circular economy. Fortunately, India and Turkey, which are two of the largest ship recycling countries, are also major steel producers with a high share of electric arc furnace use. During the past five years, these countries have recycled 25% and 34% of ship deadweight capacity and number of ships respectively. Along with Bangladesh, the world’s largest ship recycling country, and Pakistan, these top four countries have recycled 96% of deadweight capacity and 77% of ships during the last five years.
Deadweight Capacity
Over the past ten years, 7,780 ships with a deadweight capacity of 285 million tonnes were recycled. Most of the deadweight capacity recycled (60%) was built during the 1990s. In the next ten years, ships built during the 2000s will be the main source of recycling. Compared to the 1990s, more than double the deadweight capacity was built during the 2000s and will drive the expected increase in recycling. Deadweight capacity built during the 2010s increased by a further 65%, which could lead to even higher levels of recycling ten to twenty years from now.
Historically about 50% of bulk, tanker, and container deadweight capacity has been recycled by the time the ships would have been 25 years old and 90% by 30-35 years old. If we apply this recycling pattern to the currently trading ships, we estimate that 15,000 ships and 600 million deadweight tonnes will be recycled between 2023 and 2032.
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Source: Bimco
