India’s ship recycling industry holds significant potential for reducing emissions in the steel
sector, according to a report by the Climate Group and PwC. As the global leader in ship
recycling, India handles nearly one-third of the world’s retired ships, primarily at Alang,
Gujarat. Since 80-85% of a ship consists of steel, this sector can provide a critical supply of
scrap steel for crude steel production.
India’s steel industry currently accounts for 12% of the nation’s total greenhouse gas
emissions, significantly higher than the global average of 7%. This is primarily due to the
heavy reliance on coal-based steel manufacturing. The report suggests that doubling India’s
ship recycling capacity by 2028 could reduce emissions by up to 20 million tonnes by 2040,
driven by increased utilization of scrap steel.
To achieve this potential, the establishment of modern ship recycling facilities with advanced
technologies is essential. Compliance with international environmental and safety standards
would enhance operational efficiency and align the industry with global sustainability
benchmarks.
Atul Mudaliar, Director of Systems Change at the Climate Group, emphasized the
transformative potential of scrap steel in decarbonizing the steel industry. He stated, “Ship
recycling is an underappreciated sector that could make a major contribution to reducing
emissions while meeting India’s growing demand for scrap steel. Its circular economy
approach is vital for sustainability.”
The use of scrap steel offers significant environmental benefits. For each tonne of scrap steel
used, approximately 1,370 kg of iron ore, 780 kg of coal, and 270 kg of limestone are
conserved, reducing resource dependency and substantially cutting emissions.
The findings were shared in a report titled Turning the Tide: Ship Recycling as a Source of Green Steel in India, launched in New Delhi. Experts from government, industry, and civil
society deliberated on the challenges to expanding the sector, underscoring the need for
robust infrastructure and regulatory frameworks to unlock its full potential.
