China Wants to Dominate the New Era of Clean Shipbuilding

(Bloomberg) -- China wants to extend its lead in global shipbuilding to a new generation of vessels that burn cleaner fuels. 

The nation is targeting building more than half of global vessels powered by lower-carbon fuels including liquefied natural gas and green methanol by 2025, according to a joint statement released by the Ministry of Industry and Information Technology and four other departments.

The goal is in line with Beijing’s plans to future-proof its massive industrial complex by focusing on sectors that will gain prominence as the world tries to reduce emissions over the next few decades. China already dominates global production of solar panels, batteries and electric vehicles.

China’s shipyards built more than 50% of the world’s ships over the first 11 months of 2023. But shipbuilding is on the cusp of a massive transformation, with fleet owners beginning to replace oil-powered vessels with ones that burn cleaner fuels as they try to reach an International Maritime Organization pledge of zeroing out emissions around 2050. 

Last year, orders for ships powered by slightly cleaner LNG jumped to near 40% of the total, from about 15% in 2019, according to BloombergNEF. Green methanol, a fuel with little to no lifetime emissions, has seen orders more than double this year, BNEF said in an August report. 

In addition to the target for building such vessels, China also plans to speed up research and design of new types of ships powered by liquefied ammonia, hydrogen and even carbon dioxide. A unit of China State Shipbuilding Co. has secured more than $1 billion in contracts to build methanol container ships for A.P. Moller-Maersk A/S, local media reported earlier this month.

©2023 Bloomberg L.P.