A recent report reveals that 66% of EU-linked ship tonnage was recycled in South Asia between 2019 and 2025, sparking debate over regional recycling capacity. While the study critiques current practices, the industry is increasingly focusing on compliance with the Hong Kong Convention. Investors may track how upcoming EU regulatory decisions on Indian yard approvals influence the sector's operational and environmental standards.
A new report from the NGO Shipbreaking Platform and Transport & Environment has highlighted significant shifts in the global maritime recycling industry. The data shows that between 2019 and 2025, approximately 66 percent of the total tonnage from EU-linked vessels was sent to facilities in South Asia, primarily in India, Bangladesh, and Pakistan. In comparison, only 5 percent of this tonnage was processed within European-based facilities during the same period.
The report challenges the narrative that Europe lacks sufficient recycling capacity, suggesting that existing regional infrastructure could technically manage a higher volume of retiring vessels. The findings also point to the practice of flag-hopping, where owners change a ship's registry shortly before disposal to avoid the stricter oversight mandated by EU environmental regulations. According to the data, 102 vessels engaged in this practice between 2019 and 2025.
For the Indian ship recycling industry, particularly hubs like Alang in Gujarat, this report brings renewed attention to the balance between economic efficiency and environmental compliance. The global regulatory landscape for the sector has evolved, notably with the Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships, which officially entered into force on June 26, 2025. This convention provides a unified set of international standards, which many Indian yards are now prioritizing to remain competitive and compliant with global maritime expectations.
A key development for the sector is the ongoing assessment by the European Commission regarding the inclusion of additional Indian ship recycling yards on the EU-approved list. This list identifies facilities that meet specific, high-standard environmental and safety requirements. If more Indian yards receive this approval, it could enhance their ability to secure contracts for end-of-life vessels from European shipowners who must adhere to strict disposal policies.
While the sector continues to highlight its capability to maximize the value of recovered raw materials like high-quality steel, environmental concerns remain a primary point of discussion for regulators and international watchdogs. The debate over the traditional beaching method continues, with NGOs calling for stricter adherence to closed-containment recycling standards. Moving forward, the most important updates for the industry will involve the final status of pending Indian yard approvals by the European Commission and the industry’s continued progress in adopting the standards set by the Hong Kong Convention.