How the Hong Kong Convention (HKC) is Changing Global Ship Recycling

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships is reshaping how shipowners, cash buyers, and recycling yards operate worldwide. Here's what you need to know.

The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships — commonly known as the HKC — entered into force in June 2025, marking a watershed moment for the global ship recycling industry. After years of negotiation under the International Maritime Organization (IMO), the convention now mandates that vessels destined for recycling carry an Inventory of Hazardous Materials (IHM) and are dismantled only at certified, compliant facilities.

For ship owners and cash buyers, the implications are significant. Vessels without a current IHM will face increasing port-state scrutiny, and financing institutions — particularly those adhering to the Poseidon Principles — are already factoring HKC compliance into their risk assessments. The era of sending end-of-life tonnage to uncertified beaching operations is drawing to a close.

At Baraka Ship Recycling, HKC compliance is not an aspiration — it is the operational baseline. Our Sitakunda facility has been structured from the ground up to meet the technical, environmental, and reporting requirements of the convention. We maintain full IHM documentation capabilities, certified decontamination zones for asbestos, PCBs, and heavy metals, and a management system aligned with the Ship Recycling Plan requirements mandated under HKC Regulation 9.

The ESG dimension of HKC compliance is increasingly relevant to institutional vessel owners. Sustainability-linked financing, green shipping corridors, and fleet decarbonisation strategies all converge at the point of end-of-life vessel disposal. A ship recycled responsibly generates certified scrap with traceable provenance — material that can legitimately enter green construction supply chains rather than disappearing into opaque commodity markets.

Bangladesh's Ship Recycling Industry has undergone a dramatic transformation since the introduction of the BSRB (Bangladesh Ship Recycling Board) authorization framework and the national adoption of the Hong Kong Convention standards. Baraka holds a current BSRB authorization valid through 2030 and has implemented the full suite of environmental controls required under the national regulatory regime.

Looking ahead, the industry expects HKC ratification to drive a significant bifurcation: compliant yards will command premium pricing for recycled steel and attract blue-chip vessel owners seeking verifiable ESG outcomes, while non-compliant operations will face financing exclusion and port-state enforcement pressure. For ship owners evaluating recycling destinations in 2026 and beyond, HKC-certified capacity in Bangladesh represents the most commercially and ethically sound option available.