Plan Prepared to Expand Ship Recycling Market to USD 2 Billion
Pakistan has prepared a plan to expand its ship recycling market to USD 2 billion over the next decade. To achieve this goal, the country intends to adopt the Hong Kong International Convention (HKC), implement the recommendations of the International Labour Organization (ILO), and invest in community welfare initiatives. These measures form a core part of a comprehensive plan to revive the Gadani Ship Recycling Yard.
The Ministry of Maritime Affairs has announced a broad-based development program for Gadani, under which the government will construct a 30-bed hospital, residential quarters for medical staff, new labor colonies, a school, public parks, improved water supply facilities, and 32 kilometers of access roads. Officials described the initiative as a long-overdue effort to improve worker welfare and infrastructure at the shipbreaking hub.
Senior ministry officials stated that more than 15,000 ships worldwide are expected to reach the end of their operational life over the next 10 years, presenting a major opportunity for both Pakistan’s public and private sectors. Pakistan is currently the world’s third-largest ship recycling hub, and the government aims to re-establish Gadani as a global model for green ship recycling.
According to London-based Clarksons Research, global demand for ship recycling is expected to increase from the current 6–7 million light displacement tons (LDT) per year to more than 15 million LDT by 2030. The global shipbreaking and recycling market is estimated to exceed USD 10–12 billion annually over the next decade. Officials said Pakistan could secure a significant share of this market through effective enforcement of ILO labor standards and full compliance with the Hong Kong Convention, which governs environmental and safety responsibilities across the ship recycling value chain.
Despite its economic importance, the shipbreaking sector has yet to be granted formal industrial status and remains largely unregulated. The sector generates employment and supplies large quantities of re-rollable scrap to Pakistan’s iron and steel industry. However, government oversight has been limited, working conditions are unsafe, and infrastructure is severely deteriorated. Although the industry earns more than Rs5 billion annually, very little investment has been made to improve safety standards.
Environmental and public health concerns are also significant. Multi-year environmental studies conducted by the Pakistan Council of Scientific and Industrial Research and the National Institute of Oceanography have found elevated levels of lead, chromium, cadmium, and mercury in the coastal waters and sediments around Gadani.
In line with ILO recommendations and the scope of required reforms, the federal government has approved a Rs12 billion modernization program for the shipbreaking sector. According to ministry officials, this investment will fund waste management plants, fire control systems, environmental monitoring laboratories, training centers, coastal infrastructure, and compliance certification systems.
Officials emphasized that compliance with the Hong Kong Convention is not merely a regulatory requirement but a pathway to economic revival. Spread over 10 kilometers with 135 designated plots, Gadani is already undergoing transformation. Eleven yards are close to achieving environmental compliance, while another 20 yards are expected to begin green operations by June 2026.
The ministry also stressed the importance of close coordination with the Balochistan government to present Gadani as a regional model for environmentally responsible ship dismantling.
The ILO has identified systemic weaknesses in Gadani, particularly in emergency response systems, personal protective equipment, and chemical exposure controls. Since 2021, capacity-building efforts supported by the ILO have introduced training modules, standard operating procedures for safety standards, and pilot monitoring units at selected plots. The ILO’s 2023 progress review noted that Pakistan could regain access to international markets by institutionalizing risk controls in line with global labor and safety standards.
Federal Minister for Maritime Affairs Junaid Chaudhry stated that, under a broader national maritime strategy focused on environmental sustainability and climate resilience, the government is establishing a National Center of Excellence in Karachi for green ports, shipping, and integrated maritime industries.
