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New global regulations, expanding eco-friendly facilities, and innovative contracting frameworks are redefining how ships are responsibly decommissioned. These updates mark a positive shift toward safer, more transparent, and sustainable practices.
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Global Recycling Standards Become Law
- Hong Kong Convention Comes into Force
On June 26, 2025, the Hong Kong Convention for Safe and Environmentally Sound Recycling of Ships took legal effect. This milestone adds rigorous rules on hazardous material inventories, facility standards, and the requirement of an International Ready-for-Recycling Certificate before vessels enter recycling yards. - Mandatory Hazardous Material Inventories (IHM)
From the same date, new ships must carry an approved IHM, while existing vessels must comply before they are scrapped or by mid 2030. Recycling facilities must follow approved plans with full transparency on waste handling protocols.
These global standards help reduce unsafe dismantling and unwanted environmental damage, especially at shore-side yards.
Recycling Facility Upgrades in South Asia
- India Leads Certification Push
Around 96 out of 120 ship recycling yards in India, especially in Alang, now meet Hong Kong Convention standards, including upgraded floors, safety gear, and better worker training. - Bangladesh and Pakistan Adopting Change
While Indian yards lead, Bangladesh and Pakistan are rapidly preparing for certification through infrastructure and training projects. Bangladesh reported a modest uptick in certified facilities in 2024.
Egypt is also entering the mix with a planned green recycling yard in Damietta port. - Growth in Europe and Turkey
European countries like Germany and Turkey are building compliant yards to meet both Hong Kong Convention and EU Ship Recycling Regulation standards, giving shipowners more options beyond South Asia.
Eco-certified expansion in these regions offers shippers alternatives that meet strict environmental criteria.
New Contracts and Industry Collaboration
- BIMCO’s RECYCLECON
BIMCO’s new contract template, RECYCLECON, aims to standardize vessel sale agreements for recycling, balancing seller and buyer responsibilities over documentation, yard certifications, and compliance risk. - Transparency Initiatives
Organizations and shipowners are increasingly disclosing recycling choices and yard quality through transparency platforms. Industry bodies are pushing for full disclosure to combat unsafe practices.
Standardized contracts and disclosure schemes are encouraging due diligence and boosting confidence in ethical recycling.
Market Trends Gain Steam
- Rebound in South Asia Demand
In early 2025, the ship recycling market regained its footing. Buyers in India, Bangladesh, and Pakistan resumed purchases of VLCCs and large assets, helped by strong steel prices and convention preparations.
This shows that regulated recycling can be both environmentally sound and economically viable.
Going Forward
- Stronger Environmental Oversight
Enforcement of IHM requirements and facility plans ensures crews and coastal communities benefit from safer, cleaner recycling practices. - Global Compliance Network
With the Hong Kong Convention and EU rules now active, owners can choose certified yards across continents, including South Asia, Europe, and the Middle East—supporting a diversified, ethical recycling market. - Liability and Reputational Management
Under standardized contracts, sellers and buyers now share accountability for compliance. This transparency encourages better practices and limits exposure to hazardous waste risk. - Investment and Infrastructure Expansion
Continued yard certification will require further investment in safety systems, medical readiness, training, and waste handling technologies—driven by both regulation and market demand.
With binding regulation, expanded certification, market confidence, and advanced contracts, ship recycling is becoming cleaner, safer, and smarter. The shift from beaching to environmentally compliant facilities reflects a deeper commitment to sustainable vessel lifecycle management—balancing regulation, economics, and human health.