Source: adapted from OECD (2019), Ship recycling: an overview, OECD/Paris
The average ship demolition/scrapping/recycling age ranges between 20 and 32 years, depending on the vessel type, the conditions in the freight markets, and the market demand from scrapyards. When freight and charter rates are high, average demolition ages are typically high. Regulatory requirements (for example, phasing out of single-hull tankers) and technical conditions (new Panama Canal locks introduced in 2016) can also have an impact on the average ship age for scrapping.
According to UNCTAD data, the top three ship vessel scrapping countries in tonnage terms are Bangladesh, India, and Pakistan. There basically are four types of ship recycling / shipbreaking setups:
- Dry Docking: The ship is sailed into a dock, and the water is pumped out. Subsequently, workers dismantle the vessel, and upon termination, the dock is cleaned and flooded again. As building and maintaining a dock is relatively costly, this method is hardly used for ship recycling purposes only (examples: some places in Europe)
- Pier breaking/alongside: The ship is secured along a wharf or quay in calm waters, where a crane removes the pieces of the ship until the vessel is lifted or sent to a dry dock for final cutting. (examples: some places in China, Europe, and the US)
- Landing/slipway: The vessel is sailed against the shore or a concrete slipway that extends into the sea at sites with little or no tides. The ship is subsequently dismantled using a mobile crane located onshore or on barges. Additionally, temporary quays or jetties are used on-site to use heavy lifting or cutting equipment (for example: quite common in Turkey)
- Beaching: Sailing a lightened vessel full steam onto a tidal beach so that workers have access to the ship in order to cut off the ship’s pieces (examples: Bangladesh, India, and Pakistan)
Unserviceable vessels are sold based on the Lightweight Tonnage (LDT) of the vessel. The light weight of a vessel is the weight of the hull, including machinery and equipment. The length, breadth, depth, and displacement are also very important factors for buying and selling an unserviceable ship. Generally, 95% of a ship’s body is made of mild steel (M.S.), 2% of stainless steel, and 3% of miscellaneous metals, such as brass, aluminum, copper, gunmetal, and other alloys, which are important factors of ship breaking. Ships also contain stores and other materials ranging from foodstuff to clothing, from electrical to electronics, machinery of most types, life-saving equipment, drugs, communication equipment, etc. In fixing the price of a ship to be scrapped, consideration is given to the factor of whether it is a dead ship or a running one.
In recent years, several countries have tightened regulations pertaining to ship demolition to anticipate the entry into force of the IMO Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships of 2009, as well as an EU Ship Recycling Regulation in force since 31 December 2018. The Hong Kong Convention overhauls how shipowners can dispose of tonnage. It gives responsibility to owners to keep a tally of what is on a ship so that recycling facilities can reduce the health risks to workers as well as make owners and re-sellers use only approved facilities that meet specific standards. Ship recycling facilities are required to provide a ‘Ship Recycling Plan’, specifying how each vessel will be recycled based on its particular characteristics and its inventory of hazardous materials. Voluntary initiatives by industry associations and other domestic policy priorities also induce changes in the sector to make it safer and cleaner. In 2018, China imposed a ban on the entry of all foreign ships to China for recycling.