Is there a demand?
The market for ship recycling is expected to grow from currently 6-7 million tonnes per year to around 28 million tonnes per year in the 2030'ies, as illustrated in this graph:
Nonetheless, it is estimated that steel production costs could increase by approximately 30% by 2050. Per McKinsey, it is likely that there will be a shortfall of as much as 10 million tonnes of green steel in the EU alone by 2030. So, with steel demand rising significantly, with the advent of net-zero targets, with numerous regulatory initiatives to encourage sustainable progress, and with new possibilities for transparency and optimisation using cutting-edge digital tools, the scope for improving on the sustainability of steel – and other materials - is huge.
Steel recycling in Europe is a highly fragmented industry with significant potential for optimisation within processes, supply chain and integration, to gain scale and efficiency along with reducing emissions. Low-emission steel recycling and production could provide a competitive advantage from a financial and environmental viewpoint, particularly with the introduction of carbon pricing strategies (ETS + CBAM) in the near future.
"Global recycling volumes are expected to grow significantly, doubling by 2028 to 14 million light displacement tonnes (ldt) and near quadrupling by 2033 to 28 million ldt." From the report "Exploring shipping's transition to a circular industry", Sustainable Shipping Initiative & 2BHonest, June 2021.
We aim to recycle end-of-life vessels using the highest safety and environmental standards in cooperation with world-class decontamination, disposal, and recycling contractors. This includes coupling state-of-the art artificial intelligence solutions with standards in place, while providing full transparency through the entire journey of materials.
Our solution ensures that material streams are documented and certified via a track & trace solution, which also calculates Greenhouse Gas emissions, with the entire journey being presented in a final ESG report. Using artificial intelligence, we will combine the most climate-friendly and economical contractors and solutions, thus optimising the process for the benefit of both the environment and the economy.
Our innovative, circularity-driven project would be one of the first projects - and possibly the first within the maritime decommissioning sector - to include end-to-end emissions tracking and calculations for all users across the value chain to really understand the true scope of emissions for each of the subprocesses. Coupled with improved economics, this will help illustrate the important point of the green transition also having to be economically sensible to have deep and rapid impact.
We have set out to start with ship recycling within the EU. With ~40% of the world's fleet carrying EU flags, and with such ships having to be recycled in a finite number of facilities on an EU-approved list, we think the EU is the right proving ground for our solutions. This is reinforced by the probability that there will be a significant lack of green steel in Europe in the future, which makes it probable that there will be a ready market for our carbon-reducing, transparent solution.