End-of-life (EoL) ships contribute to the circular economy (CE) by salvaging and reusing valuable materials. Ship recycling (SR) activities offer a source of re-rolling and re-melting steel scraps with significant socio-economic benefits and contribute to development of local shipbuilding industry. As per the 13th edition of World Steel Recycling in Figures 2017- 2021, steel from SR helped in reduction of usage of water, energy and emission by 950 million tonnes in 2019 at global level which would have resulted in production of steel from virgin sources and thus, contributed in climate protection [1]. The steel industry, a major driver of economic growth also contributes in significant emission of greenhouse gas (GHG). Materialization of the Indian government’s plan to increase production capacity of steel to 300 million metric tonnes (MMT) by 2030, from the existing capacity of 160 MMT (approx.) will further increase GHG emission unless appropriate mitigation approach is initiated. Steel from ship-breaking helps to reduce carbon footprint of the steel industry.

Steel scrap is being used worldwide as raw material in steelworks and foundries. In addition, robust equipment with longer lifespan obtained from SR enjoys high demand from the consumer industry, ship repair and building industry, etc. for direct use. Recycled items like Lead acid batteries, Lubricants from waste lube oil, etc. have significant indirect utilization. Thus, highly profitable SR is inherently sustainable [2]. About 95% of global SR market is contributed by countries like Bangladesh, India, Pakistan, China, and Turkey which generate over 15 million tonnes of materials per annum from decommissioned ships [3].

While price of old cargo ships are driven by steel weight, more lucrative revenue from equipment and machinery drive price of service ships. The SR market is influenced by a number of factors like freight rates, operation and maintenance cost of old ships, price of steel scrap, light displacement tonnage (LDT) of ships, demands for scrap metals like steel, copper, aluminum, etc. [4]. As per estimate, 40.2% of the world's merchant fleet are contributed by vessels with age 25 years [5], implying increasing availability of ships for recycling. The Global Ship Recycling Market is projected to reach $11.5 billion by 2028, at a compound annual growth rate of 3.7% during the period 2023-2028 (BCC Research study, 2024)

SR industry conserve energy and natural resources compared to production of virgin metal and contributes significantly to Sustainable Development Goal (SDG)-12 relating to sustainable production and consumption. The SR with direct impacts on revenue, supply of raw material and employment, provides an effective way of reusing the vast amount of reusable materials from EoL ships [6]. However, SR also affects environment negatively by generating toxic substances which end up in coastal water and landfills, increasing pollution risks of air, soil and water.  

CE helps in reversing unsustainable linear models and generating long-term benefits since CE aims at maximizing the functioning of the ecosystem and improving human well-being [7,8]. Unlike linear economy, the popular CE model based on “Reduce”, “Reuse”, and “Recycle” improves resource yields by recycling materials; preserving  renewable resources, generating value by reducing negative externalities [9,10] and helps nations in their endeavors to low-carbon, resource-efficient economy. Other principles of CE include 4R, 5R, 9R, and even 10R [11].

Usable materials retrieved from ship-breaking are primarily steel and non-ferrous metals like aluminum, lead, alloys of copper, titanium, etc. which constitute about 95%-98% of the LDT of a ship [12]. In addition to reducing pressure in mining, recovered electronic and office equipment, hardware items, household appliances etc. are reused, remanufactured or recycled for their values [13,14]. However, techniques used for dismantling old ships under weak environmental and labor safety rules may result in discharge of toxic substances like PCB (Polychlorinated Biphenyls), PVC (poly vinyl chloride), PAH (polycyclic aromatic hydrocarbon), tributyltin, lead, mercury, asbestos, iso-cyanates, residual fuels, anti-fouling pesticides, etc. along with oil and waste-water into coastal waters and adjacent soil creating adverse pollution effects and risks to workers’ safety [15,16]. Despite existence of laws and regulations regarding environment protections and safe working conditions for shipbreaking workers, methods emphasizing cost consideration continue to be polluting and inefficient in various countries. For example, countries with developed facilities and strict implementation of SR operations laws offer about USD 37 per LDT, against USD 260 per LDT offered by the Indian subcontinent without compromising profit [17]. Growing consensus emerged to minimize negative environmental impact of SR by design and execution towards green ship recycling [18].

Major benefits of SR include: (i) Lowering cost of steel by providing reusable parts for new ships like bars, ingots, pipes, plates, (ii) Generating social benefits by paying wages to SR workers and multiplier effect of expenditures made by them which accelerates the economy, (iii) Lowering usage of energy and reducing emission of GHG by supplying recovered metal and thus, cause positive effects on environment and climate.

The paper addresses issues relating to evaluation of indicators of SR under different dimensions and combines the indicators in various units to get multidimensional index reflecting overall impact of ship-breaking and help in balancing socio-economic benefits with environmental objectives.

SR activities start with bidding for EoL ship by ship-breakers. The successful bidder acquires the vessel from the international brokers and takes her to the ship-breaking site either under its own power or with the use of tugs. After beaching, oil from bilges and tanks are drained, fuel tanks are cleaned, fuel and lubricant lines are disconnected from the ship. Oily waste including oily sand, rags, garbage and plastic wastes are them transported to Hazardous Waste Treatment Storage Disposal Facility. The list of hazardous materials is made, labeled, packaged and removed from SR-yard before start of cutting by trained and equipped workers as per the guidelines of the competent authorities. Disposal of such hazardous waste are done following safe and environmentally sound management of materials.

India contributes over 30% share of global SR by DWT and over 40% by numbers (mostly cargo ships) [19]. Alang-Sosiya Ship Breaking Yard (ASSBY) of Gujarat located 30 km (approx.) from Bhavnagar in the Gulf of Khambhat with 153 ship-breaking yards caters to about 98% of SR activities in India. The rest shipbreaking activities in India are undertaken in Syama Prasad Mookerjee Port (Kolkata), Mumbai Port, Goa Shipyard Limited on the banks of the River Zuari, Steel Industrials Kerala Limited, etc. ASSBY provides  about 15% of India’s total steel output [20] plus other valuable items like onboard machinery, equipment, pumps, pipes, valves, furniture, fittings and fixtures, other scrap material, etc. The fabrication and rerolling units receive about 75% of scrap recovered at Alang and the rest 25% are used as raw materials. Thus, SR activities are in conformity with ‘Waste to Wealth’ emphasized in the vision document of the SAGARMALA mega-project promulgated by Government of India in the “Maritime India Vision 2030” in 2021. 

Considering willingness of stakeholders of SR industry to comply with environment sustainability norms, India has resolved to adopt a zero-residue model for SR ensuring zero leakage of liquid waste to water from underground waste water/oily water collection from all yards to waste treatment plant. The Amrit Kaal Vision 2047 released in October 2023 articulates India’s aspiration to emerge as a global player in SR and initiates measures to facilitate eco-system for providing adequate infrastructure and policy enablers including collaboration with the EU to send old vessels from EU and OECD countries directly to Alang-Sosiya with subsidized selling price since most of the SR yards in Alang-Sosiya are fully compliant with the Hong Kong Convention (HKC) [21]. To get HKC certifications, yards are required to prove their abilities to contain pollutants, ensure safe working conditions and adoption of sound management of wastes emerging from SR activities.

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