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 freight market conditions, and the demand from scrapyards. When freight and charter rates are high, average demolition ages are typically high since ship assets will be used as long as possible to generate revenue. Regulatory requirements (for example, phasing out of single-hull tankers) and technical conditions (new Panama Canal locks introduced in 2016) can also impact the average ship age for scrapping.
According to UNCTAD data, the top three ship vessel scraping countries in terms of tonnage are Bangladesh, India, and Pakistan. There 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 (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 (in China, Europe, and the US).
- Landing/slipway: The ship 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 (common in Turkey).
- Beaching: Sailing a lightened ship full steam onto a tidal beach so that workers have access to the ship to cut it off into pieces. The metal pieces are recycled in nearby processing plants and sold as ingots (in Bangladesh, India, and Pakistan).
Unserviceable vessels are sold based on their Lightweight Tonnage (LDT). The lightweight of a vessel is the weight of the hull, including machinery and equipment. The length, breadth, depth, and displacement are 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, and communication equipment. In negotiating the price of a ship to be scrapped, consideration is given to 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 banned the entry of all foreign ships into the country for recycling.