According to the Hong Kong International Convention 2009, all shipbreaking and recycling yards in Bangladesh must be converted into green yards by June 2025. Failure to comply may result in ships from developed countries being barred from entering Bangladesh for recycling.
Despite the Ministry of Industries approving 108 yards for green conversion, only four have met the compliance standards so far. This slow progress could lead to a shortage of raw materials for steel production, potentially increasing production costs and endangering the steel sector in the country.
Bangladesh has 156 ship recycling yards, of which 50-60 are actively operational. Among these, only four are green yards, while 20-25 are under construction. The remaining yard owners face global challenges and financial constraints, making it uncertain whether they can meet the compliance deadline.
It is reported that 60 per cent of the country’s rod production comes from raw materials obtained through ship recycling. The remaining demand for rods is met by importing billets from abroad.
Entrepreneurs have expressed concerns that if concessions are not given in creating green yards, the supply of these raw materials may decrease, potentially leading to a future rise in rod prices.
Bangladesh Ship Breakers and Recyclers Association (BSBRA) Vice President and Managing Director at PHP Ship Breaking and Recycling Industries Ltd Mohammed Zahirul Islam said that according to the Hong Kong International Convention 2009, all ship breaking yards must be converted into green yards by June 2025 to continue ship imports.
“During this period, only those who can set up green yards will be able to import ships for scrapping, and those unable to establish green yards will not be permitted to import ships for shipbreaking,” he added.
The BSBRA vice president further said that converting a yard into a green yard requires an investment of Tk 30 to 100 crore; therefore, the lack of necessary funding remains a major issue for Bangladesh's ship recycling industry.
“Yard owners and the BSBRA have long been appealing to the government, Bangladesh Bank, International Maritime Organization (IMO) and various local and international investors and funding agencies for the required financial support to address this issue,” he said.
“The current price of rods in Bangladesh's market is approximately Tk 1 lakh per tonne. If the mandatory requirements of the Hong Kong Convention lead to a decrease in ship imports to Bangladesh, the price of rods could increase, potentially destabilising the steel market in the country,” Zahirul Islam warned.
"We have discussed with foreign banks about providing us with low-interest loans for a term of five to seven years, as converting a yard into a compliant green yard requires an average investment of Tk 100 crore," he added.
