The guidelines note that, in the process of recycling ships, virtually nothing goes to waste. The materials and equipment are almost entirely reused. Steel is reprocessed to become, for instance, reinforcing rods for use in the construction industry or as corner castings and hinges for containers. Ships' generators are reused ashore. Batteries find their way into the local economy. Hydrocarbons on board become reclaimed oil products to be used as fuel in rolling mills or brick kilns. Light fittings find further use on land. Furthermore, new steel production from recycled steel requires only one third of the energy used for steel production from raw materials. Recycling thus makes a positive contribution to the global conservation of energy and resources and, in the process, employs a large, if predominantly unskilled, workforce. Properly handled, ship recycling is, without question, a "green" industry.

However, the guidelines recognize that, although the principle of ship recycling may be sound, the working practices and environmental standards in the yards often leave much to be desired. While ultimate responsibility for conditions in the yards has to lie with the countries in which they are situated, other stakeholders must be encouraged to contribute towards minimising potential problems in the yards.

The concept of a "Green Passport" for ships is included in the guidelines. It is envisaged that this document, containing an inventory of all materials potentially hazardous to human health or the environment, used in the construction of a ship, would accompany the ship throughout its working life. Produced by the shipyard at the construction stage and passed to the purchaser of the vessel, the document would be in a format that would enable any subsequent changes in materials or equipment to be recorded. Successive owners of the ship would maintain the accuracy of the Green Passport and incorporate into it all relevant design and equipment changes, with the final owner delivering it, with the vessel, to the recycling yard.

IMO’s role in the recycling of ships, the terminology used to refer to ship scrapping, was first raised at the 44th MEPC session in March 2000 following which correspondence group was established to research this issue and provide a range of information about current ship recycling practices and suggestions on the role of IMO. The guidelines were developed by the Marine Environment Protection Committee (MEPC) and finalized at the MEPC 49th session in July 2003.

Ships sold for scrapping may contain environmentally hazardous substances such as asbestos, heavy metals, hydrocarbons, and ozone depleting substances and others. Concerns have been raised about the working and environmental conditions at many of the world's ship scrapping locations.

Ship breaking in Sitakunda: continuous pollution is going on from ship breaking industries. It is a real threat for marine ecosystem of the Bay of Bengal. Deposition of iron substances directly mixing with seawater. During high tide all residues are taken towards the sea. No rules and regulations have been implemented to protect the environment of the ship breaking area. Continuous activities of ship breaking creating the environment more fragile.