Bangladesh’s banking and finance sector is being invited to step up support for the country’s ship recycling industry – a move that could achieve economic and environmental goals.
(SENSREC) project
A summit organized by IMO’s Safe and Environmentally Sound Ship Recycling (SENSREC) Project in Chattogram (3-4 July 2024), spotlighted the role of banks and businesses in ensuring the environmental and social sustainability of the ship recycling industry.
Ship recycling
Ship recycling is environmentally sound and energy efficient. It involves re-using up to 96% of all materials and parts of a ship at the end of its operational life, with other benefits such as cutting the carbon footprint of the steel industry.
Improved environmenta
As one of the world’s leading ship recycling countries, Bangladesh has greatly improved environmental and human safety practices in the area since the early 2000s, with support from the SENSREC project. Some recycling yards have become leading examples of good practices.
Challenges remain
However, challenges remain and good practices still need to be extended across the country’s ship recycling facilities.
To discuss challenges and potential solutions, the event brought together representatives from the banking and finance sector, along with ship recycling companies, class societies, government officials, and ship owners and operators.
The financial costs
One of the main barriers identified was the financial costs of upgrading the infrastructure at recycling yards. This affects their ability to implement environmentally sound practices, ensure operational standards and train their workforce.
Soft loans
Discussions explored the adequacy of different financial products to support investment in ship recycling facilities. Soft loans backed by the Central Bank, equity investments and private lenders were considered.
Recycling yards
Participants visited the leading recycling yards in Chattogram to witness ongoing upgrades in the facilities. The event was opened by the Senior Secretary of the Ministry of Industries of Bangladesh, the Ambassador of Norway and the United Nations Resident Coordinator.
Norway and IMO
SENSREC is a collaboration between the Government of Norway and IMO to support developing countries for the implementation of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
Policy alignment
The project is a comprehensive and integrated approach that focuses on policy alignment, design and establishment of institutional mechanisms and governance systems, and at the same time develops the capacities of the stakeholders in the ship recycling sector by promoting sustainable social and environmental practices.
Hong Kong Convention
The overall objective of the SENSREC Project is to enhance the capacity of developing countries to promote a just transition and put in place sound and effective measures that improve the standards of health, safety and environmental compliance at ship recycling yards, as required by the Hong Kong Convention, as well as the capacity for environmentally sound waste management of hazardous waste and other materials that are generated from the process of ship breaking.
