Japanese shipping line Nippon Yusen Kaisha (NYK) has provided more details of its plans to bring ship recycling back to Japan.
The company signed a memorandum of understanding with compatriot Oono Development earlier this year to commercialise a business that would enable ships and large offshore structures to be dismantled in Japan and recycled as steel scrap and other materials.
The project is now due to go live in 2028, with the Oono’s drydock capable of handling two VLCCs at a time.
Oono, based on the southern Japanese island of Shikoku, is engaged in various environment-related businesses, ranging from demolition to waste disposal. The company’s drydock is one of the largest in Japan.
Electric arc furnaces are not yet producing pricey shipbuilding-grade steel plates, but if possible, the raw material from ship scrap metal reborn as thick plates for shipyards could potentially lead to completely circular newbuilds.
Ship recycling has largely been dominated by Bangladesh, Pakistan, India and Turkey since China closed the market for recycling foreign flagged ships in 2019. Other countries, such as Egypt, Brazil and Bahrain, have also recently moved to enter the sector, which is anticipated to see a rapid increase in demand by 2028.
Next June sees the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC) come into force with growing concern that many yards are not prepared for this shift in ship recycling standards.
“Generally, there are concerns that Pakistani recycling yards could struggle to comply with the HKC,” Clarksons Research noted in its most recent weekly report.
In related news, SK Shipping has sold a quartet of steam turbine LNG carriers approaching 25 years of age for as-is delivery Singapore at $469 per ldt, with the Korean owner noting the trading environment for these older specification ships has deteriorated significantly this year.
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