Rules for responsible scrapping and recycling of ships are set to come into force once Bangladesh ratifies the long-awaited UN’s Hong Kong Convention.

Despite being created by the International Maritime Organisation (IMO) in 2009, the rules of the Hong Kong Convention were not followed because it needed the ratification of at least 15 member states to make up a minimum of 40% of global tonnage.

Bangladesh, one of the main countries where old ships are sent for recycling, was not among the ratifying nations. But recently, the Bangladeshi government decided to amend its Ship Recycle Act 2018 to allow compliance with the Hong Kong Convention.

According to the UN Department of Economic and Social Affairs, the government of Bangladesh “has set a new target to complete by 2023” that allows for applying the UN rules. The rules of the convention will come into effect 24 months after the ratification of the agreement.

What would the convention change?

The Hong Kong Convention seeks to ensure that the process of recycling old vessels – basically those that reached the end of their operational lives – “do not pose any unnecessary risk to human health and safety or to the environment.”

India, Pakistan and Bangladesh are the top three countries in the world receiving ships for scrapping and recycling. The convention would ensure that these countries provide safe conditions in scrapping yards that protect both workers and the environment.

The current vessel-scrapping scene

A relatively large number of newbuilds are expected to enter the container shipping market in the next few years. This could create a surplus of older capacities, analysts believe. In addition, the new climate change rules, which require ships to reduce their carbon emissions, will lead to more ships being sent for retirement.

According to a report by Shipping Watch, Copenhagen-based shipping analysis firm BIMCO estimates that “over 15,000 vessels with deadweight capacity of more than 600 million tons will be scrapped by 2032.”

BIMCO analyst Niels Rasmussen says, “Many older ships are expected to be recycled earlier than normal due to the ever-tighter limits on greenhouse gas emissions.” This year, several major box carriers, such as Hapag-Lloyd and Wan Hai, announced their intention to scrap some of their old vessels as a way to minimize their carbon footprint.