China is supporting efforts to decarbonise the maritime sector and positioning itself as a key driver of low-carbon innovation in global shipping. From zero- near-zero (ZNZ) fuel development to smarter, more efficient ports, the country is investing heavily in technologies and policies that will help cut emissions across the supply chain. And as the saying goes, ‘change begins at home’. President Xi Jinping announced in September that China would achieve climate neutrality before 2060; a statement in sync with the country’s investment in the more than 600 LNG-powered and 500 electric vessels operating mainly in the country’s inland waterways, as reported by China Daily.
As in many locations, China has introduced Emissions Control Areas in key coastal areas in an effort to reduce emissions and drive cleaner shipping and energy solutions. Its ports meanwhile are implementing energy efficient solutions, with shore-power facilities now available at berths in most major ports and ZNZ re-fuelling services for vessels being introduced.
The nation is keen to capture a significant share of the ZNZ fuel industry and a key component of its work in this area is the Shanghai Environment and Energy Exchange (SEEE), which is developing a new trading platform for green hydrogen and its derivatives, such as methanol and ammonia.
China’s shipyards are also playing their part and building dual-fuel container ships capable of running on methanol or other low-carbon alternatives, for both Chinese and international clients.
Meanwhile, Chinese owners are looking further afield to Europe as they consider their investment strategies. According to Dayong Sun, LR Advisory’s lead in China, the country’s owners are increasingly seeking advice about how European and other emissions regulations will affect their fleets. “It is definitely on their minds,” Sun tells Horizons, “both from a financial and operational perspective.”
Sun, who has worked at LR since joining as a surveyor in 2011, understands the challenges from all perspectives. " The market is booming, and we are getting a lot of new contracts for different ship types, “ he asserts. “However, globally the regulations are changing very fast and clients recognise that they need to understand the requirements and then make informed decisions about new technologies and fuels.” Here strategy is key, says Sun, “and each strategy is unique to each shipowner”, noting that some of the biggest names in the Chinese shipping industry are asking for reports on the cost of operating specific ships in or between certain regions, the impact of ZNZ-fuelled vessels on key routes and, increasingly, how to secure finance to make these projects a reality.
“Ship finance for efficient ships is definitely on the government’s agenda,” says Sun, “as it sees a great opportunity for Chinese shippers to further augment their position in the maritime industry with a high-quality fleet of ships that can sail into any port.” In turn it has introduced policies to encourage banks to offer discounted or preferential finance for energy efficient projects.
Sun is optimistic that these policies could help drive further take up of ZNZ fuels, efficient ship designs and emissions reduction technologies, but also recognises that it can also be difficult for shipowners to identify the right finance for a specific vessel.
Here LR’s advisory team can play a significant role, he asserts, “as we work closely with shipowners and financial institutions to develop strategies for energy transition and sustainability".
Meet the team
Dayong Sun leads LR’s Advisory team in China. Since he joined LR he has worked across LNG/LPG carrier projects, as well as being part of the team that successfully delivered two 24,000 teu container ships between 2020-2022. He was appointed into his new advisory position in 2024. Sun has a Bachelors Degree in Materials Processing and Control Engineering from JiangSu University of Science and Technology, and a Masters Degree in Business Administration from Shanghai Jiaotong University.
LR Advisory has seen significant interest in not only ZNZ fuels as bunkers, but also in supply chain and procurement. To support clients, especially in China, Totti Jionhao Shan joined the Shanghai team in June, bringing with him fuel supply chain analysis experience gained at Guotai Junan Futures, China National Petroleum Corporation, and COSCO Shipping Group. Shan has a Masters Degree in Business Administration at Peking University and a Master of Science in Ship Management and Logistics.
