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.

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 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.

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.

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.

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.

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.

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.

More about SENSREC