Europe aims to turn ship scrap into a low-carbon steel revolution with policy and innovation

A recent report published by the NGO Shipbreaking Platform, in collaboration with Sandbag – Smarter Climate Policy and the University of Tuscia, casts a critical spotlight on the untapped potential of scrap steel from end-of-life ships within the context of decarbonising the European steel industry. This comprehensive study underscores the vital need for Europe’s steel sector to transition swiftly from the traditional, carbon-intensive blast furnace steelmaking to low-carbon electric arc furnace (EAF) technology, which effectively utilises high proportions of scrap steel. The availability of high-quality scrap steel, particularly sourced from end-of-life vessels, is poised to become a cornerstone of Europe’s circular and low-carbon steel economy.

Steel is fundamental to Europe’s industrial strategy, yet the sector faces mounting pressure to deliver on the European Union’s ambitious climate targets. The report highlights that Europe’s maritime fleet represents a massive reservoir of premium grade steel – around 70–95% of a ship’s weight can be recovered as scrap material. Crucially, this steel’s uniformity and rigorous certification standards make it ideal for both recycling and direct reuse, with the added environmental advantage of potentially reducing CO₂ emissions by up to 80% compared to virgin steel production, while conserving roughly 40% of the water and energy typically consumed.

However, the current state of ship recycling in Europe is starkly underdeveloped; just 1% of European ships are scrapped within the continent. The bulk of European ship dismantling occurs at overseas facilities, predominantly in South Asia, where beaching practices prevail – a method fraught with safety, environmental, and ethical concerns, as documented in separate NGO reports highlighting worker fatalities and hazardous conditions in yards in Bangladesh, India, and Pakistan.

Recognising these challenges, the report advocates for enhanced European ship recycling infrastructure and policy reforms aligned with circular economy principles. It calls for robust measures such as clear traceability systems, stricter enforcement of environmental and labour standards, and financial incentives to drive domestic recycling capacity. The importance of digital tools developed under initiatives like the Horizon Project CirclesOfLife is stressed, enabling precise material traceability, which is currently lacking, leading to lost steel value.

Moreover, the report points to promising innovations in direct reuse of ship steel, such as the reuse of steel plates in construction demonstrated by start-ups like Nordic Circles, and research into extending ship lifespans by organisations such as the Netherlands Organisation for Applied Scientific Research. These developments exemplify a collaborative approach involving the maritime, steel, and construction industries to close material loops and drive scalable circular solutions.

Forecasts indicate a rise in ship demolitions owned by EU and EFTA members, potentially releasing about 12 million tonnes of scrap steel annually over the next decade – enough to meet between 10 to 15 million tonnes of Europe’s scrap steel demand, roughly 20% of total consumption. Integrating this material into EAF steelmaking could significantly aid the EU’s decarbonisation agenda.

However, without robust data on steel composition and certification, much of this value remains inaccessible. “Only by enhancing traceability and documentation will the seamless integration of ship scrap into Europe’s industries, including direct reuse in construction, be possible, and significantly boost both economic and environmental benefits,” says Benedetta Mantoan, Policy Officer at the NGO Shipbreaking Platform and co-author of the report.

In parallel, industry initiatives such as BIMCO’s recently launched Ship Recycling Alliance highlight the urgency of ensuring global compliance with environmental and safety standards, in anticipation of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) entering into force in June 2025. This alliance aims to better coordinate recycling practices worldwide, including in prominent shipbreaking nations like India, Bangladesh, and Pakistan, where hazardous conditions have led to multiple worker fatalities in recent years.

The convergence of these efforts underscores a dual imperative: advancing greener steel production in Europe through strategic recycling of ship scrap and addressing the pressing social and environmental risks inherent in current global shipbreaking methods. Upcoming EU policy frameworks such as the Circular Economy Act and the Industrial Accelerators Act are identified as key opportunities to embed sustainable ship recycling explicitly within Europe’s industrial and climate strategies.

Ultimately, the report presents a compelling case that ship scrap metal is far more than just a waste resource. With targeted policies, technological innovation, and cross-sector collaboration, it can be transformed into a strategic asset that supports industrial decarbonisation, fosters a circular economy, and strengthens Europe’s environmental and economic resilience.