Ship Recycling Market

Global Ship Recycling Market Size (2024 to 2032)

The ship recycling market sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 8.1% from 2024 to 2032, reaching a value of USD 7.64 Billion by the end of 2032 from USD 4.08 billion in 2024.

Current Scenario of the Global Ship Recycling Market

The ship recycling market involves dismantling decommissioned ships to salvage valuable materials like steel and aluminum, which are then repurposed for new applications. From an environmental perspective, this process helps reduce the demand for raw materials and cuts down on greenhouse gas emissions. Economically, it provides a sustainable solution for handling aging vessels while also preventing maritime hazards. The global ship recycling market has experienced notable growth in recent years, driven by the need for sustainable practices and compliance with stricter environmental regulations. This growth is largely attributed to an increasing number of aging vessels, combined with a growing emphasis on eco-friendly recycling methods.

SHIP RECYCLING MARKET TRENDS

Automation and Robotics in Recycling

Automation and robotics are transforming ship recycling by enhancing efficiency, safety, and environmental compliance. Robotic cutting tools, for instance, are increasingly employed for precision tasks like cutting steel plates, reducing the need for human labor and minimizing risks. Industry reports estimate that such technologies can boost productivity by 20-30%, while also lowering the environmental hazards traditionally associated with manual shipbreaking.

New Shipbreaking Yards Development Across Emerging Regions

The global demand for ship recycling is leading to the development of new yards in emerging regions, including the Middle East, Africa, and Latin America. Countries such as Turkey and Brazil have been expanding their shipbreaking infrastructure, adhering to international standards. In Turkey, the ship recycling sector has grown by 15% over the last two years, with new facilities focusing on environmentally safe dismantling. These new facilities are helping diversify the ship recycling market, reducing dependency on traditional hubs like South Asia.

Green Ship Recycling Practices

Driven by stringent environmental regulations and corporate sustainability goals, there is an increasing focus on green ship recycling. The EU Ship Recycling Regulation (EU SRR) mandates that EU-flagged vessels be dismantled at facilities that meet high environmental and safety standards. This shift has led to wider adoption of eco-friendly methods like dry-docking and closed-loop recycling systems, which help minimize emissions and hazardous waste.

MARKET DRIVERS

Aging Global Ship Fleet

The global fleet is aging rapidly, with many vessels reaching the end of their operational life. Ships generally have a lifespan of 25-30 years, after which they become inefficient and expensive to maintain. In 2023, it was estimated that over 2,500 ships were scheduled for decommissioning globally. The International Maritime Organization (IMO) predicts that by 2030, the number of ships needing recycling will increase by 30%. This rise in obsolete vessels presents a significant opportunity for the ship recycling market, as owners seek to dismantle older vessels and recover valuable materials like steel, thus reducing the demand for new raw materials.

Stricter Environmental Regulations

Environmental regulations, such as the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, adopted in 2009, have driven the demand for sustainable ship recycling. Although not fully ratified globally, many nations have adopted similar regulations, pushing shipowners to recycle vessels in an eco-friendly manner. By 2023, 70% of the world’s shipbreaking activities were concentrated in South Asia, where governments are increasingly enforcing green standards. This focus on compliance has accelerated the demand for certified recycling facilities, further driving market growth.

Automation and Technological Advancements in Shipbreaking

The integration of automation and technology in shipbreaking has made the process safer and more efficient. Innovations like robotic cutting tools, automated disassembly systems, and AI-driven monitoring are being widely adopted. In 2023, the global use of automated shipbreaking processes increased by 15%, particularly in regions like Europe and North America. These advancements have enabled shipyards to process ships more quickly while adhering to strict safety regulations, fueling further growth in the market.

MARKET RESTRAINTS

Strict Regulatory Frameworks

The complexity and costs associated with regulatory frameworks are significant barriers to market growth. Although the Hong Kong Convention sets the global standard for ship recycling, it has yet to be ratified by enough nations to come into force. Regions like the European Union have implemented their own regulations, such as the EU Ship Recycling Regulation, which requires EU-flagged ships to be dismantled at approved facilities. Since 2019, compliance-related expenses have increased by an estimated 20%, discouraging smaller shipyards from entering the market and limiting the number of compliant facilities.

Worker Safety Issues

Worker safety remains a critical challenge in the ship recycling industry, particularly in South Asia, where over 70% of shipbreaking takes place. Inadequate safety measures have resulted in high injury and fatality rates. For instance, in 2022, more than 100 workers were killed in Bangladeshi shipbreaking yards, with thousands more suffering from injuries. These safety issues are exacerbated by poor working conditions, lack of personal protective equipment, and insufficient training. As safety standards become more stringent, operational costs rise, discouraging some operators from participating in the market and limiting industry capacity.

Impact of COVID-19 on the Global Ship Recycling Market

The COVID-19 pandemic disrupted global shipping, reducing demand for new vessels and expediting the retirement of older ships. From 2020 to 2022, ship recycling activities increased by 12% as shipping companies scrapped unprofitable vessels. Additionally, the Russia-Ukraine war has added to market volatility. Sanctions on Russian-flagged ships, particularly oil tankers, have led to a surge in decommissioning, contributing to a rise in recycling activity in 2023. These geopolitical disruptions have intensified the need for ship recycling, impacting the market's trajectory.

REPORT COVERAGE

SEGMENTAL ANALYSIS

Global Ship Recycling Market By Method

Beaching

Beaching remains the most common ship recycling method, particularly in South Asia, accounting for over 60% of global activity. While cost-efficient, it faces criticism due to environmental concerns.

Berthing

Berthing is anticipated to grow at a CAGR of 6.5%, driven by environmental regulations that favor cleaner, more controlled shipbreaking processes.

Dry-Dock

Dry-dock recycling is one of the safest and most environmentally friendly methods, although its high costs make it less commonly used compared to beaching.

Alongside

This niche method, which involves dismantling ships while moored at a dock, is growing steadily in regions with strict environmental controls, although its overall market share remains limited.

Others

Experimental methods that focus on minimizing environmental impact and improving safety are gaining traction. While they currently contribute a small share of the market, technological advancements may enhance their prominence in the future.

Global Ship Recycling Market By Vessel Size

Below 60,000 DWT

Vessels under 60,000 DWT comprise approximately 45% of all recycled ships by volume. These smaller vessels are easier to dismantle, contributing significantly to global ship recycling activity which is one of the major factors for this segment to grow extensively during the forecast period.

60,000 DWT to 125,000 DWT

This segment is expected to grow at a CAGR of 6.8%, driven by the increasing decommissioning of medium-sized vessels that operate in both regional and international trades.

Above 125,000 DWT

Although fewer in number, large vessels such as oil tankers and bulk carriers make up a significant portion of the recycling market in terms of revenue, due to their size and the materials involved.

Global Ship Recycling Market By Vessel Type

Oil Tankers

Oil tankers hold the largest share, accounting for approximately 35% of the total market. Their large size and high steel content make them valuable in recycling. Growing global efforts to minimize environmental impacts further bolster the demand for recycling these vessels.

Bulk Carriers

Bulk carriers are expected to exhibit the highest CAGR of around 7% during the forecast period. The predictable decommissioning schedules of these vessels, combined with their critical role in international trade, drive their significance in the recycling sector.

Offshore Vessels

Aging offshore assets, particularly those in oil and gas exploration, are a consistent driver of this segment. While not as dominant as oil tankers, they maintain a steady market share.

Liquefied Gas Carriers

The recycling of liquefied gas carriers is growing steadily, driven by stringent safety regulations. These vessels require specialized methods due to the complexity and high costs associated with their dismantling.

Ferries and Passenger Ships

The recycling of ferries and passenger ships is influenced by regulatory changes and technological advancements. These vessels, often from the tourism and transport sectors, are increasingly being decommissioned and recycled.

Chemical Tankers, General Cargo Ships, and Container Ships

These segments follow general market trends, with steady demand driven by vessel decommissioning and fleet renewal programs.

Others

This category includes smaller and less common vessel types, contributing modestly to the overall market but participating in the steady flow of recyclable materials.

REGIONAL ANALYSIS

Asia-Pacific leads the global ship recycling market, accounting for over 70% of global ship dismantling activities.

Key ship recycling hubs in India, Bangladesh, and China drive this dominance, supported by low labor costs and extensive coastal facilities. Regions like Alang in India and Chittagong in Bangladesh are major centers for the beaching method of shipbreaking. However, increasing environmental regulations are pushing the region towards safer and more sustainable recycling practices. The steady influx of older vessels from Europe and other regions is further boosting the ship recycling industry in Asia-Pacific, reinforcing its position as the global leader.

Europe represents a significant growth rate of ship recycling market, driven by stringent environmental regulations like the EU Ship Recycling Regulation (EU SRR).

Countries with high ship ownership, such as Greece and Germany, contribute to a large supply of vessels for dismantling. While many European ships are sent to Asia-Pacific for recycling due to lower costs, there is a growing trend towards developing environmentally compliant facilities within Europe. The use of green recycling methods like dry-docks and berthing is expected to grow, with the region focusing heavily on sustainable practices that meet international standards.

North America’s ship recycling market is gradually expanding, driven by the decommissioning of naval vessels and commercial ships.

New shipbreaking facilities, particularly in the United States and Canada, are being developed to reduce reliance on foreign facilities. The U.S. is promoting clean recycling technologies through strict environmental regulations, with new shipyards being constructed in states like Texas. The alongside and dry-dock methods are gaining prominence due to regulatory requirements, and North America’s focus on sustainability is expected to support long-term growth in the sector.

The Middle East and Africa region is emerging as a promising market for ship recycling due to its strategic location along major global shipping routes.

Turkey and the UAE are becoming key players, with Turkey investing in modern recycling facilities that meet EU environmental standards. This region’s ship recycling activities are largely driven by the decommissioning of aging oil tankers and offshore vessels, particularly from the oil and gas industry. As infrastructure continues to develop, the Middle East and Africa are poised to play a more significant role in the global ship recycling landscape.

Latin America’s ship recycling market is still in its early stages, with most activity concentrated in Brazil and Mexico.

The region is beginning to develop ship recycling infrastructure, largely supported by government initiatives aimed at economic growth and environmental protection. Green recycling technologies are becoming a focal point in these emerging markets, and there is potential for growth as Latin American countries invest in sustainable ship dismantling methods. Opportunities also exist in the recycling of offshore structures from the oil and gas industry, especially in Brazil, but the region remains relatively small compared to Asia-Pacific and Europe

COMPETITIVE LANDSCAPE AND KEY PLAYERS IN THE MARKET

The ship recycling market is highly competitive, with South Asia—particularly India, Bangladesh, and Pakistan—dominating the industry due to low labor costs and large-scale facilities. These countries handle the bulk of global shipbreaking activities, making them key players in the market. However, regions like Turkey and China are emerging as strong competitors, especially in the area of green recycling, driven by stringent environmental regulations such as the EU SRR. Compliance with international environmental standards and the increasing adoption of eco-friendly practices are becoming critical competitive factors, as are technological advancements like automation and robotics, which are revolutionizing ship dismantling processes globally.

List of key participants in the global Ship Recycling market include

• GMS (Global Marketing Systems)
• Leela Group
• Simsekler Group
• Ersin Shipping
• S.R.I Group
• Priya Blue Industries
• Avon Shipping
• Baijnath Melaram
• Changjiang Ship Recycling Yard
• Danish Ship Finance

RECENT HAPPENINGS IN THE GLOBAL MARKET

• In January 2024, GMS (Global Marketing Systems) partnered with a leading dry-dock facility in the UAE to comply with new government regulations banning beaching. This strategic move enhanced GMS’s position by ensuring alignment with global environmental standards and expanding its footprint in the Middle East.
• In December 2023, Leela Group committed to a $50 million investment in green ship recycling technology at its Alang yard. This initiative focuses on improving eco-friendly dismantling operations and reinforcing the company’s leadership in sustainable ship recycling in India.
• In November 2023, Simsekler Group secured a long-term contract with a European shipping firm to recycle EU-flagged vessels. Compliant with the EU Ship Recycling Regulation (EU SRR), this contract bolstered Simsekler’s dominance in the eco-friendly ship recycling market in Turkey.
• In January 2024, Ersin Shipping launched its first dry-dock facility in the UAE, aligning with the country’s new regulations. This expansion has increased the company's capacity in environmentally compliant ship recycling and strengthened its regional competitiveness.
• In October 2023, S.R.I Group expanded its recycling capacity by acquiring a new yard in Chittagong, Bangladesh. This acquisition allows S.R.I Group to process a higher volume of vessels and improves its cost competitiveness globally.
• In December 2023, Priya Blue Industries formed a partnership with a global shipping company to recycle decommissioned container ships at its Alang facility. This collaboration has enhanced its market share in the container ship recycling segment, further solidifying its commitment to sustainable practices.
• In January 2024, Avon Shipping secured a major contract to recycle oil tankers from the Middle East, marking its entry into the UAE’s regulated dry-dock market. This contract strengthens Avon Shipping’s presence in the ship recycling sector across the region.
• In November 2023, Baijnath Melaram upgraded its recycling infrastructure in India to meet the latest international environmental standards, including the Hong Kong Convention. This upgrade has enhanced its competitive edge by providing sustainable ship dismantling solutions.
• In December 2023, Changjiang Ship Recycling Yard announced its investment in automation technologies for its shipbreaking operations in China. The investment aims to improve efficiency and reduce environmental impact, positioning Changjiang as a leader in advanced ship recycling.
• In January 2024, Danish Ship Finance increased funding for green ship recycling projects across Europe and Asia. This move supports the development of sustainable recycling facilities and strengthens Danish Ship Finance’s influence as a key financier in the global ship recycling industry.

DETAILED SEGMENTATION OF THE GLOBAL SHIP RECYCLING MARKET INCLUDED IN THIS REPORT

This research report on the global ship recycling market has been segmented and sub-segmented based on vessel size, method, vessel type, and region.

By Vessel Size

• Less than 60000 DWT
• 60000 to 125000 DWT
• Above 125000 DWT

By Method

• Beaching
• Dry-Dock
• Berthing
• Alongside and Slipway
• Others

By Vessel Type

• Oil Tankers
• Bulk Carriers
• Offshore Vessels
• Liquefied Gas Carriers
• Ferries
• Passenger Ships

By Region

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa