The vessel is a good example of how far electric ships can reduce shipping emissions. Last summer, the International Maritime Organization \u2013 the UN body responsible for controlling atmospheric pollution by ships \u2013 revised its strategy for cutting emissions from global shipping. According to a press release<\/a>, the new strategy includes \u201can enhanced common ambition to reach net-zero \u2026 from international shipping by or around, ie close to, 2050\u201d. Shipping\u2019s green transition must gather speed.<\/p>\n\n\n\n Given that battery-powered vessels are set to be a part of global shipping\u2019s green transition, there is huge potential for electric ships in China, both in terms of emissions reduction and economic success.<\/p>\n\n\n\n About 15%<\/a> of China\u2019s emissions are from transportation, with shipping accounting for 6%. Domestic shipping emitted 15 million tonnes of carbon dioxide in 2020, according to estimates<\/a> from the China Waterborne Transport Research Institute, a part of the Ministry of Transport.<\/p>\n\n\n\n Between 2015 and 2020, the carbon intensity of Chinese shipping fell by 7.1%<\/a>; in shipping, carbon intensity measures CO2 emitted while moving one tonne of cargo by one kilometre. However, emissions from the Chinese shipping sector are rising in absolute terms, and China\u2019s 14th Five Year Plan, covering 2021-2025, and its Vision 2035 plan both call for cargo to be moved off roads and onto trains and ships. This means the shipping sector will struggle to hit peak carbon in 2030<\/a>.<\/p>\n\n\n\n Electric ships could be the breakthrough needed. As these battery-powered vessels don\u2019t burn any fuel, they don\u2019t emit any carbon while sailing. They have more direct environmental and health benefits too.<\/p>\n\n\n\n In 2022, China\u2019s shipping industry emitted<\/a> 1.5 million tonnes of nitric oxide and 61,000 tonnes of particulates. Emissions of those atmospheric pollutants from electric ships are virtually zero, bringing them in line with the government\u2019s cleaner air<\/a> policies.<\/p>\n\n\n\n China has the industrial base to take advantage of this opportunity. With the shipping sector\u2019s green transition speeding up, China has a chance to overtake other countries on the manufacturing of engines, key components and power systems.<\/p>\n\n\n\n For example, foreign shipping companies often use lithium nickel manganese cobalt (NMC) batteries to power their electric ships, which are more energy dense than the lithium iron phosphate (LFP<\/a>) batteries China prefers. However, LFPs are safer, cheaper and have longer life cycles, and China already has the necessary infrastructure in place to manufacture LFPs. According to the China Classification Society, a standards agency that regulates shipping and offshore installations, 36<\/a> lithium battery manufacturers had obtained its certification as of July 2023, with 30 of those specifying that they produce LFPs. Furthermore, two of China\u2019s leading lithium battery makers (CATL and Eve Energy) make LFPs.<\/p>\n\n\n\n Though a single LFP battery cell is less energy dense, China has developed LFP battery systems for ships that are denser than the NMC systems used overseas. That\u2019s according to a speech<\/a> by Tang Wenjun, deputy head of the Wuhan Chang Jiang Ship Design Institute, delivered in March at the Yangtze River Green Shipping Forum. China\u2019s battery supply chains are also second to none. Electric shipping could therefore become a route to high-quality development for the country\u2019s shipping industry.<\/p>\n\n\n\n Despite batteries\u2019 huge potential for reducing emissions, and their climate, environmental and economic benefits, currently far less than 1% of China\u2019s 121,900<\/a> cargo vessels are running on them. If electric ships are to take off as electric cars have, three challenges must be overcome.<\/p>\n\n\n\n The biggest of these is cost. The power systems required by an electric vessel are hugely expensive, pushing up its overall cost to two or three times that of a traditional, oil-fired alternative. Take the Jiangyuan Baihe as an example. In October 2022, it became China\u2019s first all-electric domestic cargo vessel with a capacity of 120 TEU (twenty-foot equivalent unit), meaning it can carry 120 containers of 20 foot in length. It has three lithium batteries, which cost CNY 3.8 million<\/a> (USD 520,000) each. The batteries have a combined capacity of 4.62 megawatt-hours and together cost more than an entire diesel vessel of equivalent capacity.<\/p>\n\n\n\n Moreover, those batteries are only warrantied for eight years. The vessel would be expected to last three decades, meaning three or four battery replacements must be budgeted for. These costs will hamper the introduction of electric shipping.<\/p>\n\n\n\n Another challenge to the widespread uptake of electric ships is recharging. Development of the ships might be steaming ahead, but the planning and construction of infrastructure for swapping or recharging these batteries lags far behind.<\/p>\n\n\n\n Recharging is usually incorporated into port infrastructure, with the connection made either manually or automatically to a junction box and then managed by a recharging-control system.<\/p>\n\n\n\n A port needs to have a sufficient electricity supply, be compliant with high-voltage safety standards, and have the capacity for smart or remote management.<\/p>\n\n\n\n Take the Wuxi Xin\u2019an Shipping Service Area. It uses<\/a> low-voltage shore power on land, with sockets of 220 volt 8 kilowatt and of 380 volt 20 kilowatt. These are not powerful enough to charge large-capacity, shipborne batteries.<\/p>\n\n\n\n At the Yangtze River Green Shipping Forum in March, Dai Chenlin of Yangtze Gold Cruises suggested<\/a> the government increase its oversight of planning and building battery charging and exchange infrastructure, to ensure its deployment and standards are uniform.<\/p>\n\n\n\n \u201cThe boats move between areas with different levels of development. Richer areas have better infrastructure. But in poorer areas the local government can\u2019t provide the same facilities, which could mean electric ships can\u2019t go there,\u201d Dai said.<\/p>\n\n\n\n Electric ships are also facing competition from alternatives fuels, such as hydrogen, ammonia and methanol. Last October, China\u2019s first vessel powered by a hydrogen fuel cell made its maiden voyage in Yichang, Hubei province. The river cruiser will avoid the burning of 103 tonnes of fuel oil a year, cutting carbon emissions by 344 tonnes, as reported<\/a> by the State-owned Assets Supervision and Administration Commission. Meanwhile, six of the world\u2019s biggest shipping firms, including Maersk, CMA CGM and COSCO Shipping, claim to be building or refitting vessels to run on methanol, according to a 2023 China Energy News report<\/a>. Two hundred orders for methanol-fuelled vessels have already been made globally, making it the first choice for container shipping firms, the report added.<\/p>\n\n\n\n The industry hasn\u2019t yet reached a consensus on which options \u2013 batteries, green ammonia, green methanol, green hydrogen \u2013 are best suited for which types and sizes of vessel. However, there is a preference for batteries when it comes to small and mid-sized vessels on short and mid-range journeys. At the Yangtze green shipping forum, Tang Wenjun said<\/a>: \u201cOver 50% of China\u2019s almost 110,000 domestic shipping vessels are of a small or medium size.\u201d The potential to refit those vessels with batteries, or replace them with battery-powered vessels, gives an idea of the size of the market.<\/p>\n\n\n\n China\u2019s local governments are pushing ahead with electric ships. Fujian was the first to support the industry, by promoting demonstrations and pilot projects<\/a> and offering subsidies<\/a> for battery- power systems, recharging infrastructure and battery-leasing services.<\/p>\n\n\n\nClimate, environmental and economic benefits<\/h2>\n\n\n\n
Three challenges<\/h2>\n\n\n\n
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<\/div>Carrots and sticks<\/h2>\n\n\n\n