The government of India’s proposed ship recycling credit note scheme has received high praise from Nikolaus Schues, President of BIMCO, one of the world’s leading shipowners’ associations. Schues called the initiative “a fantastic idea,” highlighting its potential to be a shining example of a circular economy, an essential move for both the global maritime industry and India’s environmental goals.
The ship recycling credit note scheme, a significant step forward, aims to encourage fleet owners to recycle their ships in India by offering a credit note equivalent to 40% of the scrap value. This note can be used as a rebate on the construction cost of a new vessel at an Indian shipyard, offering a dual benefit: promoting recycling while boosting India’s shipbuilding industry. Schues supports the scheme, as it will incentivize recycling in India and support its yards, positioning them as global competitors.
However, Schues raised an important concern about the alignment between the Hong Kong International Convention (HKC) for safe ship recycling and the Basel Convention. He stressed that while the HKC is set to take effect in June 2025, the Basel Convention currently prohibits European owners from sending ships to compliant recycling yards in India, citing concerns about “waste tourism.” Schues argues that the Basel Convention’s restrictions are detrimental, as they prevent European ship owners from recycling in India, even when Indian yards meet international standards. He advocated for a unified approach between the HKC and Basel Convention, which would allow European owners to benefit from Indian recycling capabilities, leading to a more sustainable, greener shipping industry. Schues emphasized that aligning these conventions would ensure that the ship recycling process is both safe and environmentally sound, benefiting all parties involved.
India’s ship recycling industry, particularly in Alang, Gujarat, has grown significantly and is now positioned to take on more than 800 ships annually by 2030. The potential for India to become a global leader in green steel production, utilizing recycled ships, is immense. Schues believes that India’s focus on using renewable energy sources like solar and wind to produce green steel could make it a powerhouse in the global steel market. Schues concluded his remarks by emphasizing that shipowners are increasingly focused on ethical recycling practices, ensuring safe conditions for workers and environmentally friendly processes. The ship recycling credit note scheme is a step in the right direction, aligning with global efforts to promote sustainability and create economic opportunities. BIMCO, through its Ship Recycling Alliance, is also working to bridge the gaps between the HKC and Basel Convention, striving to make ship recycling safer and more environmentally compliant worldwide.
