Steel scrap generated from shipbreaking could provide plentiful supply to the EU steel sector while supporting decarbonisation efforts, a new study shows.
A shift to more sustainable steel production is pivotal to the EU's carbon neutrality targets, with the steel sector playing an important role in the bloc's industrial strategy.
Increased consumption of steel scrap, particularly in more scrap-intensive electric arc furnaces, is one such route to aid decarbonisation as it produces less CO2 than primary materials and traditional blast furnaces.
EU decarbonisation and the steel industry could be supported by accessing a largely untapped source of high-quality scrap from recycling end-of-life ships, a report by the Belgium-based NGO Shipbreaking Platform, think-tank Sandbag and University of Tuscia researchers says.
About 70-95pc of a ship's weight can be recovered for high-quality scrap and only an estimated 1pc of European ships are recycled in the EU, which the report says makes boosting ship recycling capacity crucial.
Forecasts show a surge in EU and European Free Trade Agreement-owned ship demolitions in the next decade, surpassing 700 units/yr between 2032 and 2036.
Scrap generation is expected be above 10mn t/yr during that period, peaking at 12mn t in 2033. This would represent around 15pc of total scrap consumed in the EU in 2024 and usage is expected to increase significantly in the coming years.
The organisations urge the EU to improve transparency and data on end-of-life vessels and policy to ensure that shipbreaking takes place under the highest safety and environmental standards.
Legislation such as the Circular Economy Act and the Industrial Accelerators Act should also explicitly support sustainable ship recycling, the report says.
The report also says the EU should close existing loopholes in the EU Ship Recycling Regulation, applied to EU-flagged vessels and circumvented by "out-flagging practices" — when shipowners change a vessel's flag before decommissioning to avoid more stringent regulations.
Most vessels are demolished in south Asia due to higher prices offered, with India and Bangladesh the top two destinations globally in 2024, when total vessels dismantled declined, another report from the NGO Shipbreaking Platform shows.
There are concerns over the unsafe and environmentally damaging practices within shipbreaking, particularly in south Asia. At least 470 people have died in south Asian shipbreaking yards since 2009 and beaches in the region have become toxic hotspots, the NGO Shipbreaking Platform said earlier this year.
