Page 49 from: March 2014

49March 2014

S h i p b r e a k i n g

This article is based on the master thesis project
of Vally Athanasopoulou as part of a Masters in
Sustainable Development at Utrecht University,
the Netherlands, under the supervision of
Prof. Dr Ernst Worrell. For more information, visit:
www.bit.ly/1mt9ZeR, or contact:
[email protected] or [email protected]

carbon dioxide emissions. The average energy

and emissions intensity of India’s steel sector is

some 30% above the world average. The large

potential for reducing these emissions should

be at the top of the industry’s agenda given that

India has already made a commitment to cut

its emission intensity of GDP by 20-25% by

2020 when using 2005 as the reference year.

It is not hard to make the connection between

ship recycling activity and environmental ben-

efits for the steel sector. Ship scrap is a much

higher quality substitute to the DRI produced

in small-scale mills.

In the same areas
Assuming that the average energy and emissions

intensity of coal-based DRI production is

around 20 GJ per ton-DRI and 2.5 t CO2 per

ton-DRI, respectively, it can be calculated that

all EU ships scrapped in India in 2012 (a total

of 2.3 million ldt) can be considered to have

generated energy savings of 15.8 PJ by providing

a substitute for DRI. In the same manner, the

avoided carbon dioxide emissions are equal to

2.9 Mt CO2 – a figure that represents approxi-

mately 2.5% of the total emissions from the

domestic steel industry based on a 2011 report

on India’s greenhouse gases.

Apart from reduced DRI production, steel

scrap from end-of-life ships can be used direct-

ly in re-rolling mills, substituting pencil ingots

produced in induction furnaces, semis from

integrated iron and steel plants, scrap railway

track or imported scrap. Many re-rolling mills

in India are located in the same areas as the ship

recycling yards as they are focused mostly on

recycling ship scrap.

Standing at a crossroads
It seems that India is standing at a crossroads

given that ship recycling poses difficult envi-

ronmental compromises. The way ship recy-

cling is conducted at present cannot be consid-

ered sustainable in any way. Minimal or no

environmental awareness results in ships still

containing many toxic substances being dis-

mantled directly on a beach, thus causing seri-

ous pollution of the area. In addition, working

conditions and workers’ health and safety issues

are still unacceptable by European standards.

On the other side of the debate, the majority of

ship owners generally seek the cheapest option

when deciding to send a ship for scrapping, as

last year’s scrapping destination figures reveal

once again. Furthermore, India’s steel sector – as

well as its ship recyclers, brokers and cash buy-

ers – supports the view that the industry is cru-

cial for the development of the country and

that its removal would result in unnecessary

economic burdens.

Holistic approach
The most important conclusion is that complex

issues like shipbreaking deserve a holistic

approach. The recycling of ships has a particular

importance given India’s specific circumstances

– an issue which should not be ignored. Extensive

small-scale, coal-based DRI production makes

that element of the Indian steel industry highly

polluting and energy intensive. The scrap

derived from ship recycling can substitute for

this polluting iron, avoiding local air pollution

and reducing carbon dioxide emissions.

This should not be read as giving the green light

to current shipbreaking practices but should

be interpreted instead as an additional incentive

to improve them. Utilising more ship scrap can

contribute to ‘cleaning up’ the steel industry,

and this should be viewed as another reason to

start ‘cleaning up’ the beaches.

What makes steelmaking
in India unique?
• India boasts the largest production of direct

reduced iron (DRI) in the world. By 2030, it is
projected, approximately 60% of its total steel
production will be from DRI.

• The energy and emission intensity of DRI pro-
duction are much higher than those of pig iron
production. Coal-based DRI production in India
is a highly-polluting activity that relies mainly
on low-quality coal containing high levels of
ash (40%), which also results in high fugitive
dust emissions and solid waste generation.

• The Indian steel industry is highly fragmented
and is based mainly around small-scale steel
producing units, or ‘mini-mills’.

• A huge number of induction furnace- and
coal-based DRI mini-mills have emerged
across India, operated by local entrepreneurs
utilising indigenous technologies since the
initial capital investment required to set up
such a facility is very low.

• Some of the main characteristics of these mini-
mills are low productivity and energy efficiency,
uncontrolled emissions, limited or non-existent
pollution control equipment and waste man-
agement, as well as poor housekeeping.

• The extensive use of coal-based DRI combined
with the dominance of mini-mills in India serve
as a counter-effect to the environmental ben-
efits that secondary steel production offers.

India again headed the shipbreaking list in 2013 with 343 vessels scrapped.

‘The steel sector is
considered one of the

key contributors to
climate change.’

RI-2-2014-Shipbreaking.indd 49 05-03-14 16:31