Entrepreneurs of the ship-breaking industry in Bangladesh called for government policy support to navigate the significant unrest and economic stagnation in the industry due to a severe USD crisis at a session of the 4th Bangladesh International Trade Summit on Wednesday.
They reported that ship imports have halved since Russia's invasion of Ukraine in 2022.
The session, titled “Harnessing the Potential of Green Ship Recycling,” took place on the second day of the summit at the Pan Pacific Sonargaon hotel in Dhaka.
In another session, titled "Bangladesh’s Power Sector at a Crossroads," energy experts demanded the immediate shutdown of oil-fired power plants to reduce power generation costs.
During the "Harnessing the Potential of Green Ship Recycling" session, Mohammed Zahirul Islam, managing director of PHP Ship Breaking and Recycling Industries Limited, mentioned that Bangladesh's ship-breaking industry has surpassed those of India and Pakistan to become a global leader, with significant improvements in environmental and waste management in recent years.
Additionally, health facilities and insurance for workers have been established, setting a notable precedent, he said.
“However, the ship-breaking industry in Chattogram is facing tough times due to the Russia-Ukraine war and the ongoing Palestine conflict. While over 2 million tonnes of scrap vessels were imported in previous years, the current figure has dropped below 1 million tonnes,” he added.
Zahirul Islam stated that more than 130 ship-breaking yards are affected due to economic unrest.
He emphasised that despite these challenges, the future of Bangladesh's ship-breaking industry holds promise, though instability in the banking sector and economic unrest will pose significant challenges.
Norwegian Ambassador to Dhaka, Espen Rikter-Svendsen, said that most scrap ships from Europe are destined for South Asia.
However, the industry faces environmental hazards and waste management issues, raising concerns, and for Bangladesh to be eligible for European ship-breaking contracts, improvements are necessary, including compliance with EU ship recycling regulations, he said.
The Norwegian ambassador advised upgrading Bangladesh's ship-breaking yards and shutting down non-compliant ones.
Additional presentations on green ship recycling were delivered by Gaurav Mehta, director of Best Oasis from the United Arab Emirates, Dharmesh Jani, founder and CEO of Intellects Innovative Solutions Pvt Limited, UK, and Swaren Bedarkar, vice president of Electrotherm, India.
'Oil-fired power plants must shut down'
Another session titled "Bangladesh’s Power Sector at a Crossroads" was held, moderated by Mollah Amzad Hossain, the editor of Energy & Power Magazine.
During his presentation, former member of the Bangladesh Energy Regulatory Commission, Mizanur Rahman, said that prior to 2009, Bangladesh's power sector suffered from undercapacity, whereas it is currently grappling with overcapacity issues.
He pointed out that while the maximum overcapacity margin for power generation in developed countries like Japan is 20 per cent, in Bangladesh, it exceeds 25 per cent in summer and 40 per cent in winter.
This excessive capacity has not only increased costs but also put the power sector at risk, he said, projecting that by 2030, Bangladesh's overcapacity margin would exceed 40 per cent.
In the session, Humayun Rashid, managing director of Energypac Power Generation Limited, mentioned that despite the overcapacity, industrial areas suffer from frequent power cuts.
Industrial owners are not receiving quality power, which is severely affecting export-oriented industries. Additionally, the cost of power is continually rising, exacerbating the situation, he said.
BUET’s former dean Ijaz Hossain said power stations have been constructed indiscriminately without ensuring an adequate energy supply, and gas-fired power plants have been built despite a gas shortage, impacting the power sector.
He added that reliance on imported fuel has made power generation costly.
“Even so, power generation using LNG is much cheaper than using liquid fuel. However, the government continues to purchase power from private liquid fuel power plants, increasing production costs,” he said.
He strongly advised the shutdown of liquid fuel power plants.
Mollah Amzad Hossain remarked that at the current rate of constructing import-dependent power plants, Bangladesh would require $24 billion annually for energy imports by 2030.
He raised concerns about how such a large amount of foreign currency would be supplied amid the current economic crisis.
