Green Ship Recycling: How Sustainable Dismantling Adds Value and Cuts Impact

My name is Davide Ramponi, I’m 20 years old and currently training as a shipping agent in Hamburg. In my blog, I take you with me on my journey into the fascinating world of shipping. I share my knowledge, my thoughts, and my experiences as I work toward becoming an expert in the field of Sale and Purchase – the trade with ships.

Every ship has a beginning — but just as importantly, it also has an end. What happens when a vessel reaches the end of its economic life? Is it simply scrapped and forgotten? Or is there a smarter, more responsible way to manage the final chapter of a ship’s journey?

Today, I want to focus on a topic that’s often overlooked, but incredibly important: Green Ship Recycling. This approach to dismantling ships isn’t just about minimizing environmental impact — it’s also about improving safety, recovering valuable materials, and even increasing the resale value of vessels during their final transaction.

In this post, I’ll explore what green recycling means, how it compares to conventional methods, what regulations are shaping the process, and how shipowners can choose sustainable recycling options that are both ethical and economically smart.

What is Green Ship Recycling? Principles and Benefits

Let’s start with the basics.

Definition and Purpose

Green Ship Recycling refers to the safe, environmentally sound dismantling of ships at the end of their lifecycle. Unlike conventional scrapping, which often takes place in substandard conditions, green recycling follows strict protocols to protect:

• Human health

• Marine ecosystems

• Reusable materials

Core Principles of Green Recycling

1. Safe Working Conditions: Ensuring workers are protected with proper gear, training, and regulated processes.

2. Environmental Protection: Containing and treating hazardous materials like asbestos, PCBs, and oil sludge.

3. Material Recovery: Recycling valuable materials like steel, copper, and aluminum.

4. Legal Compliance: Following international conventions and national laws for sustainable practices.

The Benefits

• Reduced pollution and carbon footprint

• Higher recovery rate of reusable parts

• Better reputation for shipowners

• Fewer legal and insurance risks

• Potential premium in resale value for responsibly handled end-of-life vessels

Conventional vs. Sustainable Ship Recycling: What’s the Difference?

Not all shipbreaking is equal. The contrast between conventional and green recycling is stark — and has real implications for workers, communities, and the environment.

Conventional Recycling: The “Beach Method”

The traditional approach, still common in countries like Bangladesh, Pakistan, and India, is known as beaching:

• Ships are driven onto tidal beaches and dismantled manually.

• Workers often lack protective equipment or proper tools.

• Hazardous substances may be dumped into the ocean or soil.

• Environmental and human health risks are extremely high.

While this method is low-cost, it comes at a high ethical and environmental price.

Green Recycling: The Responsible Alternative

Sustainable recycling yards — particularly in Turkey (Aliaga), China, and some EU states — offer a far more structured approach:

• Vessels are brought into dry docks or piers, not beaches.

• Materials are removed, sorted, and processed in compliance with environmental standards.

• Worker safety and medical access are prioritized.

• Documentation is maintained for traceability and certification.

While the costs are slightly higher, the legal, environmental, and reputational returns are significant.

Regulatory Framework: What You Need to Know

Ship recycling is tightly regulated — and becoming more so every year. If you’re involved in Sale and Purchase, understanding the legal landscape is crucial.

1. The Hong Kong International Convention

Adopted by the IMO in 2009 (finally entering into force in 2025), the Hong Kong Convention sets global standards for ship recycling. Key features include:

• Mandatory Inventory of Hazardous Materials (IHM) for ships.

• Recycling yards must be certified and maintain an approved Ship Recycling Plan.

• Applies to ships over 500 GT, regardless of flag or ownership.

💡 Important Note: After years of delay, ratification is now progressing, and compliance will soon be mandatory for all IMO states.

2. EU Ship Recycling Regulation (EU SRR)

For EU-flagged ships, the EU regulation goes further:

• Only approved recycling facilities on the EU List can be used.

• IHM requirements already entered into force in 2020.

• Applies not only to end-of-life vessels but also during S&P transactions, affecting due diligence.

3. Basel Convention

This international treaty restricts the transboundary movement of hazardous waste — which includes old ships destined for dismantling. It reinforces the need for transparency and prior consent from receiving countries.

How Sustainable Recycling Increases a Ship’s Value

It may seem counterintuitive — after all, the ship is being dismantled. But choosing a green route can actually enhance the ship’s commercial value, particularly in the final Sale and Purchase transaction.

1. Higher Residual Value

• Green yards recover more usable materials, which means better financial returns for the seller.

• Certified yards may also offer better documentation and transparency, easing the process.

2. Buyers Trust Compliance

• For cash buyers, end users, and recyclers, a green recycling-ready vessel comes with fewer risks — and that can justify a price premium.

• Insurance and legal costs are often lower for vessels with compliant IHMs and responsible recycling plans.

3. Reputation and ESG Credentials

• More investors and charterers now demand ESG (Environmental, Social, Governance) transparency.

• Demonstrating a green end-of-life plan supports your company’s sustainability credentials — useful not only for PR but also for securing financing or partnerships.

How to Choose the Right Recycling Yard: A Practical Checklist

Not all green recycling yards are created equal. Here’s what to look for when selecting a yard for your vessel:

✅ 1. Is the yard on an approved list?

• For EU-flagged ships: Check the EU List of Approved Ship Recycling Facilities.

• For international compliance: Verify IMO certification under the Hong Kong Convention.

✅ 2. Can the yard handle your ship size and type?

• Some yards specialize in tankers, others in container ships or bulk carriers.

• Make sure the facility has the right equipment, experience, and docking infrastructure.

✅ 3. What are their safety and environmental records?

• Look for incident reports, third-party audits, or client references.

• Ask about emergency protocols, worker training, and hazardous material handling.

✅ 4. Do they offer transparency?

• Reliable yards provide a full Ship Recycling Plan, updates during dismantling, and a final report with recovery metrics.

✅ 5. Is it financially viable?

• While green recycling is more expensive than beaching, long-term savings in legal, reputational, and risk-related costs often outweigh the upfront difference.

Real-World Example: Responsible Recycling Pays Off

Let’s look at a case study:

An EU-based shipowner sold an aging handymax bulk carrier in 2022. Rather than sending it to a beaching yard, they selected a certified Turkish facility in Aliaga.

• They received 15% more for the scrap due to material recovery efficiency.

• The buyer avoided regulatory hurdles because the ship already had an updated IHM.

• The owner was praised for sustainability — even earning a mention in their charterer’s annual ESG report.

This is a clear example of how doing the right thing also makes good business sense.

Final Thoughts: Recycling Is the Last Voyage — Make It Count

Too often, the end of a ship’s life is seen as a financial afterthought. But in reality, it’s a strategic decision with legal, environmental, and economic consequences.

✅ Green ship recycling is safe, ethical, and increasingly required by law.

✅ Sustainable methods protect workers and ecosystems — and deliver better material recovery

✅ Choosing the right yard can maximize your vessel’s final value and minimize reputational risk.

✅ With growing ESG expectations, responsible recycling is no longer optional — it’s essential.

What are your experiences with ship recycling? Have you worked with a green yard, or are you considering one for your next S&P transaction?

Share your insights and questions in the comments — I look forward to the exchange!

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