Yachts Ditch Teak: How Sanctions & Supply Shortages Are Changing Luxury Boat Building

The world of superyachts, long associated with luxury and exclusivity, is facing a material crisis. Teak, a tropical hardwood prized for its durability and aesthetic appeal, has become increasingly difficult to source legally and sustainably. This shortage isn’t simply an environmental concern. it’s deeply intertwined with human rights issues in Myanmar, and is forcing the industry to seek alternatives, though not always willingly.

For decades, teak has been a status symbol in yacht construction, particularly for decking. Its natural resistance to water and rot made it ideal for marine environments. However, the primary source of teak – Myanmar (formerly Burma) – has been under increasing scrutiny. According to reports, Myanmar holds approximately half of the world’s known supply of teak wood. The situation dramatically changed in 2021 with a brutal military coup, transforming teak from an environmental issue into a human rights disaster.

Following the coup, the United States, United Kingdom, European Union, Canada, and Switzerland imposed sanctions on Myanmar, specifically targeting the state-controlled timber monopoly to prevent funds from reaching the military junta. The aim was to disrupt the flow of revenue that supported the regime, which has been accused of carrying out genocide against the Rohingya people. However, these sanctions haven’t been entirely effective. Investigations by organizations like the Environmental Investigation Agency (EIA) revealed that significant quantities of Myanmar teak continued to enter the EU in 2021, with another 2,000 tonnes arriving between February and November 2022. Recent data also indicates continued imports into the US.

The difficulty in tracing the origin of teak has led to concerns that timber is being re-badged as originating from other countries to circumvent the sanctions. This practice allows companies to continue using the coveted wood while appearing to comply with international regulations. Several companies have faced consequences for violating these regulations. In 2024, UK-based Sunseeker was fined for using Myanmar teak. Similarly, Dutch shipyard Oceanco, the builder of Amazon founder Jeff Bezos’s 2023 superyacht, Koru, was also fined for using illegally sourced teak. The fine levied against Oceanco – $157,000 – was a fraction of the $500 million cost of the yacht, suggesting that for some, the cost of compliance is less significant than maintaining the aesthetic appeal of teak.

Despite the ongoing issues with illegal sourcing, the industry is now being forced to confront the dwindling supply of teak. The BBC reports that the pre-sanctions stockpile is finally running out. This scarcity, rather than moral considerations, appears to be the primary driver of change. Sunreef Yachts, based in Poland and Dubai, has announced it will completely eliminate teak from its construction, opting for alternative woods and non-wood materials. Other yacht owners, including Google co-founder Sergey Bryn and Tilman Fertitta, owner of the Houston Rockets, are reportedly exploring alternative options for their new yacht projects.

Oceanco defended its use of teak by stating that “all teak used on our projects meets EU requirements and is third-party verified to ensure due diligence.” However, the continued discovery of illegally sourced teak suggests that verification processes are not foolproof. The yachting industry’s reliance on teak highlights a broader challenge: balancing luxury and sustainability. As governments implement stricter regulations regarding deforestation and responsible sourcing, companies are under increasing pressure to adopt more ethical practices.

The situation with teak serves as a cautionary tale. While the immediate crisis concerns a specific material, it underscores the potential for supply chain disruptions and ethical concerns across various industries. The search for alternatives to teak is not merely about finding a different wood; it’s about rethinking the entire approach to material sourcing and embracing greater social and environmental responsibility. The question remains whether the industry’s shift towards alternatives will be driven by genuine commitment to sustainability or simply by the economic realities of a diminishing resource.

The global teak supply crisis, which began to intensify in June 2022, represents the most severe shortage on record, though disruptions to the teak supply have occurred previously. The long-term implications of this shortage are still unfolding, but the yachting industry, and potentially others, are entering a new era of material sourcing.