Steel is one of the critical elements of Europe’s industrial strategy. To achieve the European Union’s climate targets, the steel industry must rapidly shift from carbon‑intensive blast furnace steelmaking to low‑carbon electric arc furnace technology, which can incorporate high amounts of scrap steel. As this shift will require steady access to high-quality scrap, boosting capacity to recycle ships in the EU becomes key.

Ship steel is known for its high, uniform quality and rigorous certification standards - characteristics that make it highly suitable not only for recycling but also for direct reuse. The report highlights innovation from digital material traceability tools developed under the Horizon Project CirclesOfLife, to ship life-extension research by the Netherlands Organisation for Applied Scientific Research, and the reuse of steel plates in construction, demonstrated by the start-up Nordic Circles as both economically viable and environmentally safe. Together, these developments show how the maritime, steel, and construction industries can collaborate to close material loops and scale circular solutions.

- Only 1% of European ships are currently recycled in the EU;

- 70–95% of a ship’s weight can be recovered as scrap, making end-of-life vessels a largely untapped resource;

- Recycling ship steel can cut CO₂ emissions by up to 80 % compared to the use of virgin materials, while using roughly 40 % less water and energy;

- Forecasts show a surge in EU/EFTA‑owned ship demolitions throughout the next decade, peaking at approximately 12 Mt of scrap steel per year. This could satisfy 10‑15 Mt of the EU’s annual scrap steel demand - roughly 20 % of total consumption.

To seize the opportunity ship scrap steel represents for decarbonising both the European steel and construction sectors, the EU must improve transparency and data on end-of-life vessels, strengthen material documentation, and ensure recycling takes place under the highest safety and environmental standards in EU/EFTA-located ship recycling yards. Upcoming EU policies, including the Circular Economy Act and the Industrial Accelerators Act, should explicitly support sustainable ship recycling in line with EU circularity principles. The report also urges the EU to close existing loopholes in the EU Ship Recycling Regulation, currently applying to EU-flagged vessels only and circumvented by out-flagging practices, and the EU Waste Shipment Regulation, which does not effectively tackle the fraudulent further operability claims of vessel owners.