Global Ship Recycling and the Environmental Impacts of Exporting Scrap to India

30 Oct 2023
Author: Mr. Kiran Thorat & Dr. Anand Hiremath

In the evolving corporate world, the deceptive act of " Eco misrepresentation" – portraying products or practices as environmentally friendly when they are not – has become increasingly prevalent. This phenomenon is glaringly evident in the ship recycling industry. Numerous stakeholders, seeking to capitalize on the growing trend of sustainability, assertively connect ship owners with purportedly eco-friendly steel mills. However, scratching the surface reveals a more intricate reality that demands critical examination.

The Mirage of Green Steel: Beyond Surface Impressions

At a preliminary glance, recycling ships into green steel resonates as an innovative and responsible endeavour. The overarching narrative suggests that cutting-edge steel mills utilizing scrap from recycled ships pave the way for a new epoch of sustainable steel production. But the journey of this scrap tells a story that's far from this eco-friendly image. A significant portion, rather than being processed locally, gets channelled to re-rolling mills in India, many of which have direct affiliations with the Alang ship-recycling yards in Gujarat. Astonishingly, these combined operations, with their induction furnaces, are behind a whopping 95% of GHG emissions in this sector.1

Transnational Carbon Costs: Unravelling the Hidden Environmental Price

Merely focusing on the end destination of the scrap overlooks another potent environmental concern: the transnational movement of this material. Considering the immense weight of the scrap transported, the associated carbon emissions are daunting. Maritime transportation, despite its vital role in global trade, contributes nearly 2.89% of the world's GHG emissions.2 Thus, the irony becomes palpable: a shipping industry claiming 'green' credentials is unintentionally bolstering the very problem it pledges to combat.

Economic Conundrums: The Green Mirage's Hidden Costs

Beyond the undeniable environmental stakes, ship owners face pressing economic dilemmas. Lured by the siren song of green recycling, they often find themselves receiving just a fragment of what traditional recycling avenues might offer. The short-term appeal of environmental sustainability can, at times, eclipse the broader economic ramifications.

Economic Ripple Effects: Understanding the Broader Impact

The narrative of ship recycling is multifaceted, extending beyond just environmental concerns. In nations like India, ship recycling isn't merely an industry; it's a significant economic pillar. While direct employment figures hover around 15,000, the indirect impact of this industry is profound. From material transportation to the bustling re-rolling mills, over 100,000 individuals find livelihoods linked to this sector.3

Ethical Quandaries: Navigating Labor Rights in the Green Debate

The intertwining of ship recycling with labor rights introduces further complexity. Some intermediaries critique labor practices in locations like India, yet surprisingly, their operations directly benefit from these regions. This dual stance elicits a pertinent question: Is the underlying concern genuinely about labor rights, or is it an extension of the green façade?

ESG Dynamics: Balancing Principles and Practices

In the contemporary investment realm, ESG standards have become indispensable. They serve as a beacon for ship owners and investors, highlighting ethical and sustainable practices. For ship owners, ensuring their operations align with these standards isn't just a moral imperative; it's a business necessity. Any misalignment can jeopardize investor relations and tarnish reputations

Conclusion: Steering Towards Authentic Sustainability

The complex world of ship recycling, with its numerous challenges and frequently camouflaged green promises, underscores the importance of informed decision-making. Every stakeholder, from ship owners to environmental advocates, has a crucial role to play. By critically evaluating and championing truly sustainable practices, they can collectively steer the ship recycling industry toward a brighter, more sustainable future. Collaborative efforts and transparent practices will be key in ensuring the industry does not drift away from genuine sustainability.


Dr. Anand Hiremath, Chief Sustainability Officer, GMS
Mr. Kiran Thorat, Trader, GMS

1 Source: International Steel Statistics Bureau (ISSB).
2 Source: International Maritime Organization (IMO) report, 2021.
3 Source: The Gujarat Maritime Board's study on Ship Recycling and its Socio-Economic Impacts, 2020.

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About Author

Kiran Thorat is a Trader at GMS, where he looks after sustainable ship recycling projects. Kiran believes that Sustainable Recycling is an integral part of Sustainable Shipping and a notable example of a circular economy. He holds a Bachelor's Degree from the Marine Engineering and Research Institute (DMET), India, and a Master's Degree in Energy, Trade, and Finance from Cass Business School, London.

Dr. Anand M. Hiremath is a Civil Engineer and holds a Master's Degree in Environmental Engineering from the Indian Institute of Technology Guwahati (IIT Guwahati), India. He was awarded Doctorate Degree in the year 2016 for his research work on Ship Recycling by the Indian Institute of Technology Bombay (IIT Bombay), India. In addition, he has a diploma in Industrial safety, is a qualified lead auditor for ISO 9k, 14k and 18k. Dr. Hiremath published the first practical handbook on ship recycling, entitled: "The Green Handbook: A Practical Checklist to Monitor the Safe and Environmentally Sound Recycling of Ships" which highlights the procedures the GMS RSRP follows to help both Ship and Yard Owners recycle a vessel in an environmentally-friendly manner. He is the Chief Sustainability Officer of GMS.

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