Heading in the Right Direction: Shenzhen Pushes Green Shipping

Barbara Finamore, Senior Attorney and Asia Director, Beijing

As China celebrated National Day Golden Week, NRDC also celebrated a recent announcement by the Shenzhen government to subsidize green measures for their ports. The port of Shenzhen is a major global shipping center, but ships going in and out of the world’s third busiest port also produce an incredible amount of environmentally damaging exhaust â€" it is estimated that 66% of the city’s sulfur dioxide emissions come from ships operating within Shenzhen’s water, and 14% of the city’s nitrogen oxide and 6% of particulate emissions also come from shipping.  

The Shenzhen government is following in Hong Kong’s footsteps by offering annual cash subsidies worth more than $30 million to encourage oceangoing ships (OGVs) to switch to low-sulfur fuel or use shore power while at dock. OGVs that opt for using fuel with sulfur content no higher than 500 ppm (0.5%) will be eligible to have between 75 and 100 percent of the switching costs covered by the city.

OGVs that use shore power can enjoy a concessionary electricity charge of 0.7 yuan/kWh, with the city covering the differential between the nominal electricity charge and the 0.7 yuan/kWh concessionary charge. Even though only one terminal in Shenzhen currently offers shore power, the city government will subsidize up to 30% of the cost of installing shore power infrastructure and 10% of the maintenance cost so that more terminals will be able to offer shore power. 

We are glad that the efforts of  environmental groups such as Civic Exchange, along with the work of our own team, have started to pay dividends in promoting clean port and shipping practices in the Pearl River Delta region. We commend Shenzhen not only for providing much-needed incentives to encourage the shipping industry to adopt clean shipping practices, but also for looking to mandate these green measures in the future. The shipping industry as a whole is extremely competitive, and the competition among ports in the Pearl River Delta region is particularly fierce. Therefore, Shenzhen’s goal of establishing an emission control area (ECA) in the Pearl River Delta by 2018, while progressive and bold, has the added benefit of deterring ships from shifting to the least-regulated ports, and  will ensure that efforts for reducing shipping and port emissions deliver the best environmental and health outcomes. Shenzhen officials are quite open in their hopes that this policy will be noticed by Beijing and be scaled-up to a national policy.

This much-needed incentive scheme demonstrates just how seriously local Chinese governments are taking the public’s concerns over air pollution and is an important step in fighting climate change. Such green shipping policies also help to support a global push to reduce sulfur emissions by 2020. The confluence of international regulation, domestic initiatives, and bold local leadership indicate that China is poised to be a leader in pursuing clean air in the near future.