By All in Maritime News | July 2025
A silent revolution is brewing in the maritime industry—one that won’t unfold on cargo manifests or trading floors, but across the muddy beaches and cutting yards of the world’s most overlooked coastline economies.
According to the latest projections from international classification bodies and maritime analysts, the global merchant fleet is bracing for an unprecedented wave of ship retirements, with over 16,000 vessels—equivalent to more than 700 million deadweight tonnes (DWT)—expected to be decommissioned and dismantled by 2035.
This staggering figure, if realised, will double the historical rate of shipbreaking and create what experts now describe as a “recycling supercycle”—a logistical, regulatory, and environmental inflection point for the global shipping industry.
The Numbers: How Big is the Incoming Wave?
Let’s put the figures into perspective:
- Global merchant fleet: approximately 53,000 vessels in 2025, growing annually by 3–5 percent.
- Targeted scrappage pool: 30–35 percent of today’s fleet by 2035.
- Annual scrapping rate: Projected to rise from about 1,100 vessels per year today to 1,700–1,900 by 2030.
- Prime segments at risk: Aging Capesize bulkers, vintage tankers, feeder container ships, general cargo vessels, and cruise liners.
- Average age at demolition: Currently 28.3 years for dry bulk and tankers, dropping toward 24–26 years due to decarbonisation compliance pressure.
This means the next decade will see the single largest recycling wave in the history of commercial shipping, dwarfing the 2012 post-crisis surge when over 1,800 ships were scrapped in a single year.
The Drivers: Why the Fleet is About to be Torn Apart
Three key forces are converging to trigger this supercycle:
1. Environmental Regulations Are Forcing Early Retirement
The enforcement of the IMO’s Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) measures in 2023–2024 have made thousands of older ships uneconomical. Ships that fail to meet minimum energy performance will face speed restrictions, operational limits, and rising carbon levies, making many commercially obsolete.
2. Freight Volatility and Fuel Transition Uncertainty
Post-COVID volatility, high operating costs, and the emergence of dual-fuel ships (methanol, LNG, ammonia) have fragmented owner strategies. Shipowners now prefer to scrap early and invest in compliant newbuilds with greener propulsion rather than retrofit older, less-flexible hulls.
3. Geopolitical and Financial Pressures
Sanctions, insurance embargoes, and ESG requirements from financiers are limiting the lifespan of “gray” tonnage—including aging tankers involved in sanctioned oil trades. In parallel, charterers and investors are demanding scrapping at green-certified yards, forcing premature exits from non-compliant vessels.
The Bottleneck: Is the Recycling Infrastructure Ready?
Not yet. And that’s the heart of the problem.
Currently, over 85 percent of global ship recycling tonnage takes place in Bangladesh, India, and Pakistan—where labor costs are low, safety oversight is minimal, and environmental practices are deeply flawed.
While a handful of yards in Alang (India) and Chattogram (Bangladesh) have made progress toward Hong Kong Convention and EU Ship Recycling Regulation compliance, most facilities lack impermeable surfaces, wastewater containment, and worker PPE programs.
Dr. Irina Gustavsson, Global Head of Sustainability at a major classification society, warns:
“This is a looming global environmental crisis. We are about to push millions of tonnes of toxic, steel-intensive vessels into a system not equipped to process them safely. Without urgent investment, the cost could be irreparable.”
Common hazards during beach-breaking include asbestos exposure, persistent organic pollutants (POPs) in paints and electronics, heavy metal runoff from bilges, and fatal accidents due to lack of mechanised dismantling.
The Regulatory Landscape: Promises vs Practice
The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), adopted in 2009, officially entered into force in June 2025. It sets a minimum standard for:
- Inventories of Hazardous Materials (IHM) aboard every vessel
- Yard-level safety plans, pollution prevention, and audit controls
- Environmentally sound handling, containment, and monitoring of toxic waste
However, global enforcement is uneven, and many leading recycling countries are still transitioning. Meanwhile, the EU Ship Recycling Regulation remains the most stringent, requiring all EU-flagged vessels to be dismantled only at EU-approved yards, most of which are outside South Asia.
African Perspective: Missed Opportunity or Emerging Frontier?
Eng. Daniel Esilaba, Marine Surveyor and Managing Director of Observater Surveys & Services Ltd., based in Mombasa, sees the coming crisis as a turning point:
“Africa is watching. East Africa, in particular, has the maritime heritage, geographic advantage, and trained manpower to rise as the next frontier for certified, green ship recycling. But we must act now—invest in compliant facilities, align with international frameworks, and build regulatory capacity.”
Eng. Esilaba revealed that Observater is working with port authorities in Mombasa, Beira, and Dar es Salaam to evaluate feasibility studies for HKC-aligned yard development. He added:
“If even three yards across the East African seaboard reach HKC compliance by 2030, we could safely recycle hundreds of vessels while creating dignified, skilled jobs and positioning the region as an ESG-aligned blue economy hub.”
Stakeholder Responsibilities
- Shipowners: Must declare IHMs, commit to certified yards, and avoid last-minute flag switching to bypass regulations.
- Yard Operators: Must invest in safety systems, containment infrastructure, proper worker housing, and medical protocols.
- Governments and Port States: Need to establish regulatory frameworks, monitoring bodies, and fast-track compliance incentives.
- Financiers, P&I Clubs, and Insurers: Should enforce green demolition clauses and support the global shift through ESG-aligned credit mechanisms.
What’s Next: Demolition Will Never Be the Same
The future of shipbreaking will not resemble the past. Several trends are reshaping how the world dismantles its largest machines:
- Methanol-, LNG-, and ammonia-fueled ships will require new protocols for fuel system purging, cryogenic handling, and bunker tank dismantling.
- Offshore modular dismantling platforms may emerge in non-coastal regions or deepwater zones, enabling safe processing of mega-vessels away from human settlements.
- Blockchain-based inventory systems may track materials recovery, emissions, and IHM disclosures across ship lifecycles, supporting full transparency and circular economy pathways.
Conclusion: Crisis or Catalyst?
The upcoming decade will challenge shipping to reconcile its industrial past with its environmental future. The world can no longer afford to treat end-of-life vessels as out-of-sight scrap. If managed well, this recycling supercycle can spark innovation, deliver cleaner coastlines, and rewrite the legacy of ship demolition for generations to come.
If mismanaged, it could become one of the largest environmental injustices in global trade history.
All in Maritime News will continue to lead in exposing the truths, opportunities, and responsibilities that define ship recycling’s next chapter. From cutting yards to policy tables, we will deliver the intelligence the world’s maritime professionals need to act decisively—and responsibly.
For coverage on shipping innovation, logistics transformation, and marine energy transition, stay with All in Maritime News.
Contact: news@allinmaritime.com | Tel: +27 063 069 1191
Offices: Durban | Dar es Salaam | Nairobi | Dubai
Website: www.allinmaritime.com
All in Maritime News – Your Source for Global Maritime Intelligence
