Global Ship Recycling Market Outlook 2025–2030

As the industry finally turned its attention to the pressing need for safer and more sustainable ship dismantling, two key regulatory frameworks emerged.

The Hong Kong Convention (HKC) was introduced as a global framework to regulate ship recycling and enforce accountability worldwide. Although the EU Ship Recycling Regulation (EU SRR) enforces similar standards, its reach is limited to European-flagged vessels.

The HKC officially entered into force on 26 June 2025, marking a milestone in international efforts toward sustainable ship recycling

This article delves into the effectiveness of these regulations in practice, the challenges expected by recycling facilities and shipowners over the next five years, and how these frameworks may transform the environmental outlook of the industry.

Market Size & Growth (2025–2030)

Recent market forecasts offer a clear projection for the green ship recycling industry's trajectory:

The global ship recycling market is expected to grow from $9.1 billion in 2025 to approximately $13 billion by 2030, representing a compound annual growth rate (CAGR) of 7.4%. In addition, market data segments by vessel type and size:

Includes categories such as bulk carriers, container ships, oil tankers, general cargo ships, offshore vessels, and others.

Vessels are grouped by deadweight tonnage (e.g., below 60,000 DWT, 60,000–125,000 DWT, and above)

Key Growth Drivers

Scrap Steel Demand

The strong need for scrap steel in construction and manufacturing continues to drive ship recycling activity.

Fleet Aging

An aging global fleet nearing end‑of‑life contributes to elevated scrappage volumes.

RegulatoryMomentum

Implementation of the HKC has raised global awareness among shipowners about the need for timely, safe, and environmentally responsible recycling practices.

Technological Adoption

While automation and robotics are being slowly introduced, the sector remains predominantly labor-intensive, particularly in South Asia, where most operations continue to rely on manual work.

Regional Insights

South Asia’s Dominance
South Asia continues to lead the global ship recycling industry, commanding approximately 80% of the market share, with India and Bangladesh at the forefront.

Priya Blue: A Beacon of Responsible Recycling

Founded in 1994 in Alang, India, Priya Blue stands as the country’s largest Class NK‑certified and HKC-compliant green ship recycling yard. It was the first yard in India to earn ClassNK certification under the Hong Kong Convention and has also been audited under the EU‑SRR framework and is awaiting a positive report by Q3 2025.

Europe & Turkey: Compliance-Focused Operations

Ship recycling operations in Europe and Turkey adhere strictly to both the Hong Kong Convention (HKC) and the EU Ship Recycling Regulation (EU‑SRR). According to the European Commission (12th edition of the European List of ship recycling facilities, published December 2023), there are currently nine EU-approved ship recycling facilities in Turkey included on the European List.

Challenges Ahead (2025-2030)

Bringing about a great difference on a global level comes with great challenges too. As momentum builds behind greener ship recycling, the path forward remains far from smooth. From rising costs to regulatory tightness and financial exposure, key challenges are shaping the industry.

High Compliance Costs

Meeting the new environmental and safety standards under HKC and EU SRR carries significant financial weight. Upgrades to infrastructure, safety equipment, and environmental controls demand substantial capital, particularly burdensome for smaller yards.

Monitoring, Auditing & Regulatory Scrutiny

Compliance comes at the price of transparency. Ship recyclers must navigate frequent audits, comprehensive documentation, and inspections, which is an operational burden that grows with regulatory complexity.

Skilled Workforce Requirements

Ensuring worker safety when handling hazardous materials isn't just procedural; it requires investing in training, personal protective equipment (PPE), and supervision. Yards must ensure skillful execution without compromising compliance.

Market Volatility

Fluctuating scrap steel prices and elastic demand threaten profitability. Sudden shifts in steel value or trade policy can undermine financial stability and strategic planning.

Environmental Impacts & Opportunities

As all the efforts are being done just to serve one ultimate purpose—protect the environment and promote sustainable recycling. The entry into force of the Hong Kong Convention (HKC) on June 26, 2025, is ushering the ship recycling sector into a new era, where all the efforts are being done just to serve one ultimate purpose—protect the environment and promote sustainable ship recycling.

Stronger Pollution Controls
With HKC-mandated Inventories of Materials (IHM) and authorized recycling facilities, hazardous discharges during vessel dismantling are being curtailed, reducing ecological harm protecting coastal ecosystems

Rising Traceability and Transparency

The HKC establishes clear frameworks for documentation and audits across the ship’s lifecycle from design to decommissioning, bringing improved accountability to recycling practices.

Alignment with Circular Economy Principles

As stated in multiple recent reports, the growing demand for scrap steel, combined with aging global fleets, is fueling market expansion. This creates a major opportunity for recycled materials to feed into construction and manufacturing sectors, supporting a more sustainable industrial loop.

Industry Shifts Toward Compliance

The enforcement of HKC, alongside evolving EU SRR mandates, is rapidly positioning compliant yards as preferred partners. Non-compliant players risk losing credibility and market access, especially in regions seeking verified, green recycling options.

The Bottom Line!

Between 2025 and 2030, the ship recycling industry is poised for significant transformation:

·      Forecasts place the market on an upward trajectory, from $9.1 billion in 2025 to approximately $13 billion by 2030, at an estimated CAGR of 7.4%

·      Regulatory developments, especially HKC’s implementation and compliance pathways for Authorized Ship Recycling Facilities (SRFs), are spurring safer, greener practices across regions.

·      While pressures persist, such as compliance costs, workforce training, and supply chain transparency, the momentum toward environmental responsibility remains clear and compelling.

To achieve the vision of sustainable growth and development, there are many challenges to be managed and opportunities to grow, but overall, this will ensure that we are heading towards a greener and sustainable future for the maritime industry. 

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