As the global energy transition takes centre stage, countries are rushing to meet their climate goals, and industries are being restructured around sustainable energy projects—wind farms, solar panels, and electric grids—to help power the future. However, as demand for sustainable energy infrastructure increases, so does the need for raw materials like steel, copper, and aluminium, which are essential in the construction of these projects.
Today's reality is that we cannot afford to extract these materials the same way we always have since mining and smelting undoubtedly contribute to the very same emissions we are trying to eliminate. This is where the ship recycling industry, often seen as a 'villain' sector, comes in to save the day.
By extracting valuable materials from abandoned vessels, our industry can directly contribute to the circular economy and support the construction of renewable energy infrastructure. The steel from scrapped vessels can be used to build wind turbines, the copper can wire electric grids, and the aluminium can be framed for solar panels. In short, we can transform waste into wealth.
Recycling in the Age of Green Energy
Let's start with the basics. Every year, between 600 and 1000 vessels are scrapped globally. According to data released by the NGO Shipbreaking Platform, 630 commercial ships and offshore units were sold to the scrap yards in 2020 alone. Of these vessels, 446 large tankers, cargo, and passenger ships were broken down in South Asia, amounting to nearly 90% of the gross tonnage dismantled globally. When a ship is dismantled, up to 95% of its components can be recycled, from steel to copper and aluminium superstructures.
This is important because steel, in particular, plays a critical role in renewable energy projects, especially solar and wind. According to the International Energy Agency (IEA), worldwide renewable power capacity will almost double between 2024 and 2030. Today, each new MW of solar power requires up to 40 tonnes of steel, and each new MW of wind power requires between 50 (onshore towers) and 200 (offshore towers and foundations) tons of steel. As such, recycling steel from ships means we can avoid the carbon emissions that come from mining new iron ore and processing it into steel, activities that account for nearly 8% of global CO2 emissions.
In places like India, where shipbreaking is a major industry, we are already seeing how recycled steel is being integrated into local manufacturing industries. Earlier this year, JSW, Tata, and ArcelorMittal Nippon planned to ramp up their scrap-based steel production into their operations to cut carbon emissions.
Ship Recycling as a Circular Economy Solution
The concept of a circular economy is simple: we recover resources from used products and inject them back into the production cycle, and as such, vessel recycling is one of the best examples of this principle. The materials recovered from old ships have already served one lifecycle, and with recycling, they are given another—often as part of a more sustainable product.
Most recently, Ørsted, a Danish leader in offshore wind power, announced its commitment to either reuse, recycle, and recover all the wind turbine blades in its portfolio—in pursuit of a more sustainable practice. Today, between 85% and 95% of a wind turbine can be recycled, and so Ørsted's decision is a concrete example of a circular economy in action, using old ships to power new energy solutions.
The recycling process is also becoming more sophisticated, safer, and cleaner. In Europe, the Ship Recycling Regulation ensures that vessels flagged under EU countries are dismantled in facilities that meet strict environmental and safety standards. In turn, these facilities are reclaiming higher percentages of reusable materials while minimising pollution and worker hazards. This depicts how the ship recycling industry not only helps meet the increasing demand for green energy but does so in a way that aligns with global sustainability goals.
Policy and Investment
However, this industry will not thrive without the necessary policy frameworks and financial investments. Governments and international organisations must recognise the vital role ship recycling can play in the green energy transition and incentivise the industry accordingly. One way to do this is through carbon credits and tax incentives for companies that recycle materials into renewable energy projects.
Investors, too, should be involved. There is a massive opportunity for ethical investors looking to put their money into greener businesses. As ship recycling becomes more integrated with renewable energy, we can expect to see significant growth in the market for recycled materials. The global metal recycling market size was estimated at USD 850 billion in 2023 and is expected to grow at a CAGR of 4.0% from 2024 to 2030, and the ship recycling sector is prepared to be a key contributor.
A Sustainable Future for All
As an industry pioneer, I have witnessed—and been involved in—the transformation of vessel recycling from a dangerous business to a crucial element in the global circular economy. The next step is to ensure that the materials we recover are used in building super infrastructures that will power a greener, healthier, and more sustainable future for all.
