The majority of low carbon shipping research focuses on fuel efficiency and mitigation measures related to operations and technology. A key piece of the low carbon puzzle that has received insufficient resource to date is reducing the energy use and greenhouse gas emissions associated with primary vessel material production. The circular economy seeks to rebuild capital by enhancing flows of goods and services, to ensure they circulate at a high quality, through maintenance and re-use, without being disposed or scrapped. The current business model for the design, procurement, use and disposal of ships does not embrace the principles of the circular economy. As ship owners do not operate their own ships, but rather charter them on varying terms that rarely include fuel efficiency and costs, owners have no incentive to implement measures to reduce carbon intensity through a ships life cycle. The aim of the research is to sustain the residual value of materials embedded in ships, to create a premium for the material at the end of the vessels life. In turn, it will provide evidence to demonstrate that by embracing the circular economy, the overall financial and environmental viability of the renewable B9 Ship will be improved when compared to the current ship breaking model, and that this value can be realised through new asset leasing models. This paper will: outline further the concept of the circular economy in relation to shipping; review the existing process for the scrappage of small ships at the end of life in terms of material flow, financial arrangements and value chains and; provide preliminary analysis of new material flow scenarios to maximise re-use and re-manufacture of ship steel in a circular economy. The research involves collaboration between Tyndall Manchester, B9 Shipping, Tata Steel and Ferroday Ltd.