16,000 ships are anticipated to be scrapped in next ten years

Over the next ten years, ship recycling is predicted to more than treble, with an estimated 16,000 ships—or 700 million deadweight tons (DWT)—being demolished worldwide. Following the official implementation of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships on June 26, there has been a notable increase.

BIMCO, a prominent international maritime association, has raised its forecast from 15,000 ships. Almost three times as much tonnage and nearly twice as many ships have been recycled in the past ten years. This indicates an urgent need for additional investments in ship recycling yards that adhere to international safety and environmental requirements.

Using average recycling rates per vessel type and age, the estimate was based on recycling trends from 2000 to 2019. For instance, BIMCO anticipates a similar trend over the following ten years if 10% of 20-year-old capesize bulk carriers were destroyed during that time. Going forward, scrapping activity is anticipated to be dominated by ships constructed in the 2000s. Between 2015 and 2024, ships built in the 1990s accounted for 62% of recycled DWT and 35% of destroyed ships. Nonetheless, the 2000s saw a significant boom in shipbuilding, with tonnage rising by 115% and ship production increasing by 31%. In contrast to the 20% of ships and 67% of DWT constructed in the 1990s, just 3% of those ships and 5% of their DWT have been recycled thus far.

While bulk carriers, tankers, and container ships will make up the majority of scrapped tonnage, around 91%, they account for just over half of the total number of vessels. The remaining will include general cargo vessels and fishing boats, each expected to contribute numbers close to the larger sectors. From 2015 to 2024, most ship recycling took place in South Asia. Bangladesh, India, and Pakistan handled 86% of recycled DWT and 58% of vessels. Their dominance grew even stronger after 2017, when China exited international ship recycling.

Since then, China has scrapped less than 2% of global DWT. Outside South Asia, Turkey remains a notable location, especially for dismantling offshore vessels. Despite some projects to expand shipbreaking capacity in other regions, BIMCO believes South Asia will remain the primary hub for the foreseeable future.

The previous record for ship recycling occurred in 2012, with about 1,800 ships and 60 million DWT dismantled. Starting in 2027, annual recycling volumes could surpass that record each year, given the large number of aging ships and tighter environmental policies. However, the actual number could vary depending on market dynamics. BIMCO stated that if the shipping market remains strong, recycling might fall below projections. On the other hand, weak markets or increased pressure to cut emissions may push scrapping levels even higher.

The Hong Kong Convention is key to this shift, setting mandatory rules for how ships must be dismantled at the end of their service. The Convention aims to protect both the environment and the workers involved in shipbreaking. It took effect on June 26 after years of preparation, with 24 countries having ratified it.

These include key ship recycling nations such as Bangladesh, India, Pakistan, and Türkiye, along with major ship registry nations like Japan, Liberia, Panama, and the Marshall Islands. Collectively, these countries represent over 57% of the world’s shipping by tonnage.

The IMO sees the enforcement of the Hong Kong Convention as a historic moment. Dominguez stated that the move represents years of hard work and will boost global efforts to safeguard both human health and the environment during ship recycling…According to Ingvild Jenssen, the NGO’s executive director, the Convention benefits shipping companies more than workers, by allowing them to avoid the full cost of safe and sustainable recycling. She also warned that it could undermine competition by disadvantaging responsible recyclers who operate at higher safety standards. Still, the Convention’s supporters argue that it brings long-overdue structure to a dangerous and often poorly regulated industry.