China Looks To Dominate Building of Lower-Carbon Fuel Ships

China plans to manufacture more than half of the worldwide vessels powered by cleaner fuels such as LNG and methanol by 2025, according to government guidelines.   

As part of efforts to become a carbon-neutral economy by 2060, China expects to build more ships running on cleaner fuels than on oil-derived marine fuels that currently dominate the global fleets, its Ministry of Industry and Information Technology said on Thursday, as carried by Reuters.

“Implement innovation in ship engines, improve the efficiency of traditional fuel and LNG marine engines, and steadily increase the use of LNG in marine engines at scale,” say the guidelines the ministry has issued. 

The international shipping industry has been looking for years to lower its carbon footprint and move away from fuel oil in powering ships. According to the International Energy Agency (IEA), international shipping accounted for about 2% of global energy-related carbon dioxide (CO2) emissions in 2022.

Per the IEA data, historically, oil products have made up more than 99% of total energy demand for international shipping. In 2022 biofuels met less than 0.5% of global international shipping energy demand.

“To get on track with the NZE Scenario, the penetration of low- and zero-emission alternative fuels, including biofuels, methanol, hydrogen, ammonia and electricity, will need to increase in this sector,” the agency said in a recent report tracking the clean energy progress in the sector.

New ship orders are increasingly about vessels using alternative fuels, says the IEA, which noted that A.P.Moller-Maersk, one of the biggest shipping companies in the world, announced 19 methanol dual-fuel containerships on order as of October 2022 for delivery between 2023 and 2025. These orders have been followed by others from large companies such as CMA CGM, Cosco, and Cargill. 

According to Clarksons Research, in 2022, a record 61% of all newbuild orders by tonnage were alternative fuel capable. Of the total orderbook, 39.9% of tonnage is set to use LNG (825 units), 3.5% to use methanol (64 units), 2.1% to use LPG (88 units), and 2.4% due to use other alternative fuels (around 250 units to run on fuels such as ethane, hydrogen, biofuels, and battery/hybrid propulsion).  

By Charles Kennedy for Oilprice.com

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