As the world’s largest exporter and shipbuilder, China could pave the way to a carbon-neutral global trading system.
Chinese President, Xi Jinping, said last month that his country’s Belt and Road Initiative (BRI) to stimulate global trade and integration must be “green and sustainable”.
Media coverage of the BRI has focused so far on how to ensure environmental standards on the land-based “belt”.
But there has been far less discussion about the other half of this vast global project – the 21st-century “maritime silk road”, in which Chinese firms are involved in either building or operating 42 ports in 34 countries.
In a world where 80% of the volume of international trade is carried by ship, China has a far bigger role in “greening” global trade than most people realise.
China’s support was crucial to the adoption of the UN International Maritime Organisation’s (IMO) landmark deal to at least halve the global shipping sector’s greenhouse gas emissions by 2050, signed in April last year by more than 100 IMO member states.
If Chinese shipbuilders don’t keep up with the decarbonsiation demanded by the shipping industry, they risk losing top spot.
The global shipping sector emits more of these gases each year than all but the top five emitting countries, at almost 1 gigatonne of CO2 equivalent. Getting these emissions under control had eluded governments for more than 20 years after the 1997 Kyoto protocol tasked them with working through the IMO to do so.
I was there last April and saw China’s delegation speak first in congratulation of the IMO agreement upon its adoption.
China’s support for greener maritime trade in this forum matters for two reasons. The first is commercial: China is the world’s largest exporter of products.
This was, therefore, the biggest possible vote of confidence that shipping could decarbonise in line with the Paris agreement, without harming global trade.
The second is technological: China is the largest shipbuilder in the world (just three countries, China, Japan, and South Korea, build more than 90% of new ships).
Because of the long, 25-year lifespan of modern ships, there is a slow replacement rate. Meeting the IMO’s 2050 emissions reduction goal, therefore, requires that zero-carbon vessels are commercialised by 2030, just 10 years away, before expanding to become the norm.
Building Green to Stay on Top
I believe China would not have committed to the IMO emissions agreement unless it was confident it could maintain its top spot in the shipbuilding industry throughout this transition, and use its remarkable lead in renewable energy technology to build zero-carbon vessels within a decade.
Although the government supports this timeline, I’m not seeing much discussion of this yet from China’s shipbuilders; if they don’t keep up with the decarbonisation demanded by the shipping industry, China risks losing its top shipbuilder spot.
Denmark’s Maersk, the world’s largest container shipping company, has committed to this same timeline to reach carbon neutrality, as has Japan’s NYK.
If big container lines can’t buy zero-carbon ships from China, they will buy them somewhere else.
So What Kind of Technologies are We Talking About?
Batteries are set to power all of Norway’s ferries by 2023, 177 inland clean-up vessels in Suzhou near Shanghai, and even a 2,000-tonne cargo ship on the Pearl River in Guangdong province.
However, for the foreseeable future, batteries will not be able to power the huge ships which carry international trade.
Fuels, of a carbon-neutral sort, are therefore essential. Hydrogen has been given a boost by recent announcements on fuel cells, although so far shipping has been neglected in this debate.
The maritime sector already has many green hydrogen projects underway: a ferry in the US, the world’s first ocean-going car and passenger ferry in the UK, and two zero-emission hydrogen fuel cell container ships set to connect Poland, Sweden, and Norway.
In Belgium, the 120-year-old container shipping company CMB is trialling fuel cells on one of its container ships, and later this year the port of Antwerp is opening a hydrogen refuelling station for ships.
The speed of this announcement surprised many in the industry who thought hydrogen in the maritime sector was years away from commercialisation.
Meanwhile, engine manufacturers view shipping decarbonisation as a “gold rush”.
MAN Energy Solutions, one of the world’s largest engine manufacturers, announced in December it had successfully developed the technology to use cryogenically cooled hydrogen as an on board ship fuel a major breakthrough.
Once cooled to a temperature of -253C, hydrogen turns from a gas to a liquid and is reduced to 1/800th of its volume, making onboard transportation easier.
As a result, MAN says hydrogen will play a significant role in its target of achieving zero fossil fuel emissions within the marine sector by 2050.
While China’s shipping companies and ports are making incredible progress on cleaning up air pollution, especially sulphur, there is a lack of debate on green hydrogen or other potential zero-carbon fuels.
Liquefied natural gas for instance, while great at reducing air pollution, has little to no benefit in reducing greenhouse gas emissions once methane slippage is taken into account.
Methane slippage is the process of unburnt methane escaping from all parts of the industrial process, from upstream production to storage, to the internal combustion engine.
While oil and shipping companies are making efforts to minimise methane slippage, even very small single-digit percentage leaks can erode the greenhouse gas benefits of switching from oil to gas, because methane is 84 times more potent than CO2 in its warming effects, in the first two decades after its release.
Perhaps more dialogue is needed between China’s world-leading renewable energy firms, and its world-leading shipping sector, to place the country at the head of a future carbon-neutral global trading system.
While this dialogue develops, what else is happening in the short term? This month the IMO held its newest round of talks in London on how to decarbonise shipping.
The key topic discussed was how to achieve short-term CO2 cuts in the next four years.
Limiting Speeds & Emissions
The three main candidates are global speed limits (like road vehicles, ships consume less fuel at slower speeds), operational efficiency standards for all existing and future ships, and Japan’s proposal of shaft power reduction.
The latter would require an engine power limitation system, similar to those used in automobiles, to be installed on all commercial shipping vessels to limit power to an optimum level of fuel consumption.
Aside from its CO2 cuts to slow climate change, speed reduction has huge co-benefits for ocean life, in terms of reduced underwater noise affecting whales, dolphins and fish, and reduced risk of the ship strikes which are currently pushing some endangered whale species to the brink.
Speed reduction as a policy is now being proposed by France as well as Greece, which owns 17% of the world’s shipping tonnage, more than any other country.
They were joined this week by over 100 shipping company CEOs who wrote a letter to IMO in support of global speed limits at sea, including one of China’s largest shipowners Sinotrans Shipping Ltd.
This measure will need the support of China’s delegation at IMO to be adopted something that remains to be seen.
But if speeds at sea were regulated it would reduce the carbon footprint of most manufactured products China exports, perhaps useful at a time when big consumers such as the government of California are more closely studying their “imported carbon”.