Bangladesh maintained its position as the world’s leading ship-breaking destination in 2024, despite a decrease in the import of scrapped vessels compared to the previous year.

The country imported 130 scrapped ships last year, a 23.53per cent decline from the 170 ships imported in 2023, according to data from the Ship-breaking Platform (NSP), an NGO advocating for safe and ethical ship dismantling.

Industry insiders attributed the significant drop in both the number and tonnage of imported ships to issues with opening letters of credit (L/Cs) amidst the ongoing US dollar crisis and other related factors.

They also noted that the total tonnage of imported ships had fallen, indicating a shift towards smaller vessels.

‘We are unable to open L/Cs for large-sized vessels due to the dollar shortage, and approval from the central bank is required for opening L/Cs over $3.0 million,’ said Hossainul Arefin, executive committee member of the Bangladesh Ship Breakers and Recyclers Association (BSBRA).

He added that obtaining various approvals, including environmental clearances, can take up to two months, accruing bank interest during the delay.

Furthermore, the industry’s reclassification from ‘orange’ to ‘red’ has increased the number of required certifications, Arefin explained.

Ships previously imported typically weighed between 40,000 and 50,000 tonnes, but now, vessels being brought in are averaging around 2,000 tonnes, according to industry insiders.

Despite the industry’s assurances of improved safety measures and a reduction in accidents, rights groups continue to raise concerns about the human and environmental risks associated with ship-breaking worldwide.

According to the NGO Shipbreaking Platform, Bangladesh remains the world’s top destination for ship dismantling in 2024, despite a decline in imports.

In 2024, India imported 101 scrapped ships, followed by Turkey with 84, Pakistan with 24, the European Union with 25, and the rest of the world with 45 ships dismantled.

In comparison, Bangladesh imported 122 end-of-life ships for dismantling in 2022, down from 254 in 2021. This marks a downward trend since 2019, when the country imported 236 ships. The figures for 2020 and 2018 were 144 and 185, respectively.

Local ship-breakers have attributed the decline since late 2019 to several factors, including the Covid-19 pandemic and subsequent shutdowns.

While business rebounded in 2021 due to pent-up demand, the recent dollar crisis and high interest rates are now again negatively impacting trade.

The Bangladesh Ship Breakers and Recyclers Association (BABRA) reported that the total tonnage of imported ships fell to less than 1 million tonnes in 2024, compared to around 3 million tonnes in the fiscal year 2018-19, when Bangladesh imported 272 ships for dismantling.

The platform stated that globally, 409 ships were dismantled in 2024, with 255 ending up in South Asian yards.

Despite significant concerns for workers, local communities, and coastal ecosystems, Bangladesh remains the shipping industry’s first choice for scrapping.

In 2024, nine workers lost their lives while dismantling ships in South Asia, and another 45 were injured due to unsafe working practices.

One of the worst accidents occurred at SN Corporation’s yard in Chattogram, Bangladesh, where a massive explosion while dismantling an oil tanker claimed the lives of six workers and left six others critically injured.

Investigations revealed severe negligence, disregard for safety protocols, and inadequate hazardous waste management.

As a result, SN Corporation, despite holding a Statement of Compliance with the Hong Kong Convention from the Japanese classification society ClassNK, lost its environmental clearance in Bangladesh.

In response to safety concerns, Hossainul Arefin, executive committee member of BABRA, claimed that only 30 to 35 yards in Bangladesh are currently operational and are actively working to comply with safety regulations.

Seven yards have already received a ‘green certificate,’ and another 20 are in the process of obtaining certification through their own financing.

Ingvild Jenssen, Executive Director of the NGO Shipbreaking Platform, criticised the low standards set by the International Maritime Organization (IMO) regarding ship-breaking facilities, particularly highlighting the case of SN Corporation.

‘That a facility such as SN Corporation – and more than 100 beaching yards that have similarly obtained Statements of Compliance – supposedly fulfils the requirements of the Hong Kong Convention says much about the low standards set by the IMO,’ Jenssen said.

‘Clearly, the upcoming entry into force of the Hong Kong Convention does not provide the solutions needed to shift the sector towards sustainable ship recycling,’ Jenssen concluded.