EU eyes ship scrapping for decarbonisation: 12 million tonne potential

Ships that for years went to low-standard breaking yards in South Asia are now seen as a critical scrap reserve for Europe. The European Union is turning to a new raw material source that could accelerate industry's decarbonisation targets: decommissioned ships. According to Brussels, proper management of this idle potential will reduce dependence on external sources for both steel and critical minerals.

12 million tonne potential in ship scrapping

According to a report presented at the EU Circular Economy Act Open Public Consultation, with the growing and ageing global fleet, Europe can use end-of-life ships as a strategic source of high-quality steel and support the decarbonisation of the EU's steel and construction sectors.

Number of ships to be scrapped will increase fivefold

A joint study by the Belgium-based Ship Recycling Platform, Sandbag, and Tushia University estimates a fivefold increase in the number of ships sent for scrapping over the next decade, producing over 100 million tonnes of recyclable steel. Since recycling steel saves approximately 1.5 tonnes of CO2 per tonne compared to primary production, this could contribute to significant emission reductions. The report emphasises that ship steel could be directly reused in construction, increasing circularity and reducing waste.

Only 11% recycled within the EU

According to studies, 70–95 percent of a ship's weight can be recovered as high-quality scrap. However, only 1 percent of European ships are recycled within the EU. This creates a significant capacity gap in the industry's push for low-carbon production. Research projects that over 700 ships will be decommissioned annually between 2032 and 2036. Scrap volume is expected to reach 12 million tonnes by 2033 — approximately 15 percent of today's total EU scrap consumption. The rapid development of environmentally sound and safe dismantling facilities is one of the most critical items on Brussels' policy agenda.

Aluminium scrap concerns grip Europe

Critical minerals competition has spread to aluminium scrap. According to EU Trade Chief Maros Sefcovic, scrap is now a "strategic commodity" and more than 1 million tonnes leak out of the bloc annually through exports. Moreover, aluminium scrap's exemption from US primary metal tariffs is creating a price differential that accelerates flows from Europe to the US.

European Aluminium argues that US tariffs are attracting European scrap, while the US Aluminium Association blames China and calls for "targeted export controls." The value of scrap is directly linked to the transformation of EU industry. Europe aims to meet 25 percent of its critical mineral demand through recycling by 2030. Aluminium, requiring only 5 percent of the energy of primary production when remelted, sits at the centre of low-carbon manufacturing. However, the region's primary aluminium production has declined 25 percent since 2011 as many smelters closed due to high energy prices. This has made scrap a fundamental raw material for the EU. Yet 15 percent of recycling furnaces sit idle due to insufficient feedstock.

Trends in scrap flows are putting further pressure on the EU. Project Blue estimates that Europe's scrap exports outside the EU grew at 8.9 percent annually between 2018 and 2024. On the US side, July data shows rising shipments from Germany and Spain. China is the rising new competitor. Having reversed its low-quality scrap ban in 2020, Beijing rapidly increased imports. China's aim to grow demand further and raise recycling capacity to 15 million tonnes/year by 2027 is intensifying global competition.