A new study by NGO Shipbreaking Platform and Transport & Environment reveals that the majority of EU-owned and EU-flagged vessels are dismantled in South Asia, particularly in India, Bangladesh, and Pakistan. While environmental groups criticize the trend as a failure of EU industrial policy, industry representatives emphasize the region's strong compliance, efficient material recovery, and established downstream markets.

A recent study conducted by NGO Shipbreaking Platform and Transport & Environment (T&E) indicates that the vast majority of EU-owned and EU-flagged ships continue to be dismantled outside Europe. A significant share of these vessels ends up in South Asian facilities, including Alang in Gujarat, India, alongside locations in Bangladesh and Pakistan, despite what the report describes as sufficient ship recycling capacity within the European Union.

According to the report, a total of 706 EU-flagged or EU-owned ships were dismantled worldwide between 2019 and 2025. Out of this total, only 22 per cent were recycled at facilities located within the EU, which accounted for just 5 per cent of the total tonnage. In contrast, more than half of the vessels were dismantled in India, Bangladesh, and Pakistan, representing 66 per cent of the total tonnage. Most of the remaining ships during this period were recycled in Turkey.

The findings prompted criticism from environmental organizations, which argued that the trend reflects a failure of EU industrial policy, resulting in the loss of valuable steel and other recoverable materials to markets outside Europe. Philippine Bernard, Policy Officer at NGO Shipbreaking Platform, stated that the situation represents a profound failure of EU industrial strategy rather than merely an environmental issue.

The report also noted that European recycling facilities possess adequate capacity to handle all EU-owned vessels reaching the end of their operational lives. Furthermore, it alleged that shipowners circumvent EU regulations by changing vessel flags shortly before sending ships for recycling, pointing to 102 ships that switched from an EU flag to another registry prior to dismantling.

Industry sources have pushed back against the characterization of South Asian facilities. Anand Hiremath, CEO of the Sustainable Ship and Offshore Recycling Program, argued that individual recycling facilities should be judged on their compliance and actual performance rather than their geographical location, noting that it is inappropriate to characterize an entire geography as operating under poor conditions.

Nayeem Noor, Vice-President for Business Development at GMS, explained that India remains an attractive destination because shipowners weigh a combination of responsible recycling, regulatory compliance, and the ability to maximize the residual value of vessels. He added that capacity alone does not determine where an end-of-life vessel is recycled.

According to Noor, India has developed a strong recycling ecosystem alongside a downstream market for recovered steel, machinery, and reusable materials, enabling efficient vessel recycling and maximum material recovery. South Asia continued to maintain a significant share of global ship recycling activity in the first half of 2026, with India recycling 50 ships, Bangladesh recycling 57, and Pakistan recycling 10 during the January-June period.

"The debate over global ship recycling highlights the critical balance between regional policy goals and established industrial efficiencies. India's prominence in this sector, particularly through hubs like Alang, is driven by robust downstream markets and strong material recovery capabilities rather than capacity alone. For businesses operating in heavy industries and asset recycling, long-term viability depends on a combination of regulatory compliance, operational performance, and the ability to maximize residual value." — Dr. Shishir Gupta, Founder & CEO, StartupLanes

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