Strategic Management of the Asset Lifecycle under the Hong Kong Convention: The Critical Need for Early Preparation for IHM and Readiness for Recycling
As the global ship recycling industry focuses on stricter compliance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships (HKC), the importance of proactive compliance planning for the inventory of hazardous substances (IHM) Part I, Part II, and Part III has increased significantly in the maritime sector. The recent implementation of IMO Resolution MEPC.379(80), which introduced the 2023 Guidelines for the Preparation of the Inventory of Hazardous Materials, together with the most recent amendments adopted in April 2025 under MEPC.405(83) in April 2025, has further heightened the sector’s expectations regarding the identification of hazardous substances, the accuracy of documentation, and preparation for recycling.
Strategic Management of the Asset Life Cycle under the Hong Kong Convention: The Crucial Need for Early Preparation for IHM and Readiness for Recycling
These developments clearly indicate that compliance with ship recycling regulations is no longer viewed merely as an end-of-life requirement. Instead, it is becoming a key lifecycle compliance responsibility for ship operators, fleet managers, classification societies, and stakeholders in the recycling industry.
Entry into force and current observations within the sector
The Hong Kong Convention officially entered into force on June 26, 2025, marking a significant milestone for the global shipping industry. As a result, shipowners are now under increasing pressure to ensure that their fleets have up-to-date and technically compliant IHM documentation throughout the ship’s operational lifespan.
Industry observations indicate that many ship operators and fleet managers are currently facing operational backlogs due to last-minute preparations to comply with the regulations. Due to the growing demand for HKC-compliant recycling facilities and increasing pressure from classification societies, company executives are encouraged to complete IHM preparations well in advance of making final decisions regarding the decommissioning of ships.
Expected demand from the sector: According to a BIMCO sector analysis, more than 16,000 ships may need to be recycled in the coming decade. This is expected to be more than double the number of ships recycled globally over the past ten years. As a result, demand for IHM-related services is expected to rise rapidly.
To accommodate this enormous increase, there is a sharp rise in technical demand for:
preparation and maintenance of IHM Part I
Sampling of hazardous substances and laboratory analyses
Documentation of operationally generated waste (Part II)
Preparation of the inventory for Part III
Verification of compliance with HKC regulations
Material Declaration (MD)
Supplier’s Declaration of Conformity (SDoC)
Identification of hazardous locations and on-board marking
Supporting documentation for recycling and coordination of classifications
Support for Ready for Recycling certification, including coordination for the issuance of the International Ready for Recycling Certificate (IRRC), if applicable.
Critical Risk: If fleet operators delay the identification of hazardous substances (IHM Parts I, II, & III) and the associated documentation until the final phase of a ship’s lifecycle, the sector may face significant operational bottlenecks in the coming years.
Technical Implications of IMO Resolutions MEPC.379(80) and MEPC.405(83)
The adoption of IMO Resolution MEPC.379(80) introduced updated technical guidelines for the preparation and maintenance of the inventory of hazardous materials on board ships. The guideline modernized several crucial aspects of IHM development, thereby optimizing transparency throughout the lifecycle:
Improved identification procedures: greater accuracy during active inspections to identify obsolete materials.
Coordination among stakeholders: Better structural links between ship operators, original equipment manufacturers (OEMs), suppliers, and recycling companies.
Updated threshold values: Modernized reference values for chemical and physical limits on hazardous substances.
Focus on the life cycle: Tighter administrative requirements for ongoing verification during structural modifications or repairs.
Further amendments introduced in 2025 via MEPC.405(83)—which significantly tightened the threshold values for cybutryne in anti-fouling systems—demonstrate that the IMO continues to refine the practical implementation of the IHM requirements as the HKC comes into force worldwide. These updates will directly result in stricter controls during flag-state inspections, verification processes by classification societies, approvals for recycling, and commercial transactions involving older ships. Incomplete or outdated documentation will lead to direct commercial liability and operational disruptions.
Why early preparation for IHM is strategic—and not just a legal obligation
Avoiding Last-Minute Operational Delays
As global demand for recycling increases, inspection companies, laboratories, and classification societies may face a heavy workload. Early preparation helps shipowners avoid market congestion caused by limited availability of inspectors, delays in laboratory testing, and backlogs in certification.
Simplify the collection of historical vessel information
For older ships, gathering data on machinery, insulation, refrigerants, manuals, piping specifications, coating declarations, and hazardous substance declarations becomes increasingly difficult over time. Early preparation improves the accuracy of documentation and reduces the number of missing data points during inspections.
Optimized recycling planning
By keeping IHM documentation up to date, asset managers can coordinate recycling planning more efficiently with HKC-compliant recycling companies. It also ensures smoother communication between ship operators, cash buyers, recyclers, and classification societies.
Improved commercial readiness
Ships with up-to-date IHM documentation that are ready for recycling experience significantly smoother commercial transactions with cash buyers, recyclers, financiers, insurers, and compliant recycling facilities.
Reduced pressure to comply with multiple regulations
At the same time, the shipping industry faces compliance pressures related to EEXI, CII, EU ETS, FuelEU Maritime, and decarbonization. Delaying IHM preparation creates unnecessary operational stress as ships approach major repairs, dry-dock scheduling, sales decisions, or recycling phases.
Current market outlook and recycling trends (toward 2030)
The ship recycling market is on the cusp of a profound structural transition. Although freight revenues remain stable in specific sectors, aging fleets face heavy fines for non-compliance and rising operational costs. Environmental regulations and decarbonization requirements are rapidly accelerating fleet renewal strategies. Industry experts expect recycling volumes to reach historic highs as a result of:
Aging global fleets requiring modernization
Strict compliance pressures related to EEXI and CII assessments
Rising fuel prices, fines related to the fuel transition, and technical maintenance costs
Rising dry-dock costs and structural compliance obligations
Carbon reduction targets, the EU Emissions Trading System (EU ETS), and upcoming FuelEU Maritime obligations
Geopolitical tensions, uncertainty surrounding global trade, fluctuations in steel prices, rising bunker prices, and regional conflicts also influence commercial decisions regarding vessel operations and the timing of scrapping. Although some shipowners are temporarily postponing recycling to monitor freight revenue, long-term forecasts point to massive growth in demand for recycling. Consequently, during the sector’s expected transition period through 2030, an international shortage of certified hazardous materials inspectors, laboratory capacity, and green recycling consultants is anticipated.
Regional Recycling Dynamics: South Asia and the Emerging Compliance Hubs in Europe
India (accounting for 35.4% of global ship recycling in 2025) remains one of the most important global centers for ship recycling activities. Modern shipyards in Alang (India) and large facilities in Chattogram (Bangladesh) have invested heavily in infrastructure improvements to meet HKC standards. Recent maritime reports confirm that more than 110 recycling yards in India and 23 yards in Bangladesh have fully modernized their operations or adapted them to meet HKC compliance requirements.
At the same time, Turkey is also strengthening its position in the European ship recycling market, particularly through facilities in Aliaga, which continue to improve environmental and operational standards to support recycling activities that comply with EU and HKC standards. Although South Asia is expected to remain the dominant global recycling region in the near future, Turkey will continue to play a strategically important role for European shipowners seeking compliant regional recycling solutions
Key Challenges and Action Plan Matrix
To systematically overcome bottlenecks, stakeholders must understand the key operational challenges and the corresponding measures to mitigate them:
Operational / Compliance Challenge
Strategic Action Plan for the Sector
Shortage of qualified inspectors and laboratories
Enter into long-term contracts with certified IHM inspection companies and environmental laboratories in a timely manner to ensure capacity.
Incomplete historical documentation on older vessels
Begin collecting data and conducting structural analyses years in advance; use visual inspections and spot checks when documentation is insufficient.
Rising costs of technical compliance
Budget for IHM lifecycle management as an ongoing operational expense rather than as a one-time end-of-life cost allocation.
Commercial risk for non-compliant assets
Prevent market devaluations or sales impediments by maintaining continuously active, classification authority-verified IHM Part I documents.
Technical support and strategic conclusions
For companies engaged in the preparation of IHM, hazardous substance surveys, and ship recycling consulting, market opportunities are expanding structurally. The most effective approach involves a paradigm shift: promoting early preparation of IHM Part I during routine operations, establishing transparent coordination of sampling, and supporting managers during classification and flag verification processes.
The shipping industry is entering a definitive era in which environmentally friendly recycling is a standard requirement for operating, rather than an alternative option. Shipowners must ensure the timely preparation and submission of complete IHM documentation, including Parts I, II, and III, before recycling operations commence. This ensures smooth compliance management in accordance with the guidelines of IMO Resolution MEPC.196(62), optimal commercial flexibility, and drastically reduced operational pressure, thereby circumventing potential bottlenecks during the anticipated compliance pressure in the sector leading up to 2030.
Public and Regulatory References
International Maritime Organization (IMO) – Official resolutions and frameworks
IMO Resolution MEPC.379(80) – Guidelines for 2023 for the preparation of the inventory of hazardous substances
IMO Resolution MEPC.405(83) – Amendments for 2025 to the IHM Framework
IMO Resolution MEPC.196(62) – Technical Standards and Guidelines for the Development of the Ship Recycling Plan (SRP)
BIMCO Official Website – Analysis of Fleet Recycling and Market Forecasts
Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships
SAFETY4SEA Maritime Information & News
Marine Insight – Technical maritime journal
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