Bangladesh Banking Sector Urged to Support Sustainable Ship Recycling Industry

The banking and finance sector in Bangladesh is being encouraged to enhance its support for the country’s ship recycling industry, aiming to achieve both economic and environmental benefits. The initiative was highlighted at a summit organized by the International Maritime Organization’s (IMO) Safe and Environmentally Sound Ship Recycling (SENSREC) Project in Chattogram on July 3-4, 2024.

The summit emphasized the crucial role of banks and businesses in ensuring the environmental and social sustainability of the ship recycling industry. Ship recycling is known for its environmentally sound and energy-efficient practices, reusing up to 96% of all materials and parts from ships at the end of their operational life. This process also contributes to reducing the carbon footprint of the steel industry.

Bangladesh, one of the world’s leading ship recycling countries, has significantly improved its environmental and human safety practices in ship recycling since the early 2000s, thanks to support from the SENSREC project. Some recycling yards in the country have become exemplary models of good practice.

However, the industry still faces challenges, particularly in extending good practices across all ship recycling facilities in Bangladesh. Financial barriers, such as the costs of upgrading infrastructure, hinder the implementation of environmentally sound practices, adherence to operational standards, and workforce training.

The event gathered representatives from the banking and finance sector, ship recycling companies, class societies, government officials, and ship owners and operators to discuss these challenges and explore potential solutions. Key discussions focused on the adequacy of various financial products to support investment in ship recycling facilities, including soft loans backed by the Central Bank, equity investments, and private lenders.

Participants had the opportunity to visit leading recycling yards in Chattogram to observe the ongoing upgrades in facilities firsthand.

The summit was inaugurated by the Senior Secretary of the Ministry of Industries of Bangladesh, the Ambassador of Norway, and the United Nations Resident Coordinator, underscoring the high-level support for the initiative.

The SENSREC Project continues to play a pivotal role in promoting sustainable ship recycling practices in Bangladesh, aiming for broader implementation and long-term sustainability.

For more information about the SENSREC Project, visit IMO’s SENSREC page.