The global ship recycling industry is navigating a complex landscape marked by stringent regulations, environmental concerns, and shifting economic dynamics. As the sector approaches a pivotal moment with the impending enforcement of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) on June 26, 2025, ship recyclers worldwide are bracing for significant transformations.
Regulatory Overhaul and Compliance Challenges
The HKC, adopted in 2009, aims to enhance safety and environmental standards in ship recycling practices. Its enforcement will mandate that all ships carry an Inventory of Hazardous Materials (IHM) and that recycling facilities meet rigorous safety and environmental criteria. While this move is lauded for promoting sustainable practices, it poses compliance challenges, especially for recycling yards in South Asia, which currently handle approximately 95% of the world’s ship dismantling activities.
The European Union’s Ship Recycling Regulation (SRR) further complicates the landscape by requiring EU-flagged ships to be dismantled only at facilities listed in the European List of Approved Ship Recycling Facilities. This list excludes many South Asian yards, prompting some shipowners to reflag their vessels to circumvent these restrictions.
