Taking Stock of China’s Actions to Steer Green Shipping

This is a guest post by Freda Fung, Lena Suponya, Wang Yan, Xiya Zhang, Jingtao Shan.

As the world copes with the unprecedented public health crisis posed by the coronavirus, many people are experiencing extreme hardship from threats to their health and financial well-being. One of the impacts of the coronavirus pandemic is that many cities under lockdown have seen a sharp decline in air pollution, as factories are shuttered, cars are left idle, and ports are partially shut down. The slowdown in economic activities caused by the pandemic, and a global economic downturn that many fear will follow, would also cut global demand for shipping. However, if the 2008 financial crisis is any indication, the drop in shipping activities, and the air pollution generated, is but a temporary dip, and will likely rise again after the outbreak is contained and when social and economic activities resume.

Air pollution aggravates lung disease and impairs our ability to fight off respiratory infections. It has been linked to higher mortality rates during the Spanish flu and the SARS outbreak, and more recently to the Coronavirus. So, while many of us are staying home waiting for the pandemic to end, let’s take a moment to note measures that countries have been taking to sustain air pollution reductions.

April 1^st marks the 4^th anniversary of the implementation of China’s groundbreaking regulations to control pollution from the shipping industry. These regulations established a Domestic Emission Control Area (DECA) within which ships are required to use lower-sulfur fuels (0.5 percent sulfur content). The rules initially applied only to ships docking at ports in China’s three main port regions—the Yangtze River Delta (YRD), the Pearl River Delta (PRD), and the Bohai Sea. Since 2019, these rules have become compulsory for all ships plying China’s territorial waters, which extend 12 nautical miles beyond the shore.

These critically important DECA regulations—the first to be enacted outside of North America and parts of Europe - reflect China’s proactive approach to combating air pollution. It puts China years ahead of much of the world in enforcing the 2020 global marine fuel standard of 0.5 percent recently established by the International Maritime Organization (IMO). This progressive action shows that China has analyzed and understands the risks to public health and the environment posed by air pollution from the shipping sector.

Studies conducted in the past few years by Chinese researchers clearly show that shipping has become a significant source of air pollution in China’s main port cities (as shown in the above figure). Because these port cities are so densely populated, emissions from ships threaten the health of a large portion of China’s population.

This problem is expected to intensify in the coming years if shipping emissions remain unchecked and if the rapid growth in shipping seen in the past two decades continues. From 2002-18, the volume of cargos handled by coastal and inland ports in China saw a sevenfold and tenfold increase, respectively, while the volume going through seaports has more than doubled. Since China is home to 7 of the world’s top 10 container ports and handles nearly one-third of all global seaborne containerized trade, as measured in 2018, China’s actions will have strong implications for global maritime emissions reductions.

The good news is that, thanks to the adoption of the DECA regulations and the government’s efforts to ensure that ships abide by the rules, sulfur oxide and particulate pollution from ships at China’s three main port regions have been reduced by 33 percent and 22 percent, respectively, from 2015 to 2018.

Today, portable quick fuel analyzers that can measure the sulfur content of fuel samples in a few minutes are routinely used in China by the Maritime Safety Administration (MSA). MSA inspectors use these analyzers to verify compliance with the DECA regulations during onboard inspections in cases where their suspicions have been aroused (see for example here, here, and here). Last year the MSA also began to trial the use of advanced remote measurement technologies fitted on bridges and drones to screen high-emitting ships that navigate within the DECA. These compliance monitoring measures, similar to those that have been successfully adopted in European countries (as summarized in our report), help China to establish a strong enforcement presence to deter ship operators from circumventing the DECA regulations, as well as the 0.5 percent global sulfur cap that came into effect on January 1, 2020.

In addition to placing tighter restrictions on shipping emissions, China is also making efforts to transform and “green” its shipping industry. The complementary measures that have been introduced include:

1. mandates, in conjunction with grants provided by the national and city governments, to build shore power infrastructure,
2. local government incentives (such as those introduced by Guangzhou and Shenzhen) to encourage shipping companies to use onshore power,
3. incentive programs for promoting the use of inland vessels powered by liquefied natural gas (LNG), and
4. pilots for advanced "new energy" vessels.

China has already made significant progress in each of these areas. The country is on track to complete construction of nearly 500 sets of shore power equipment at ports across the country, and has already completed construction of about 280 LNG inland vessels. Last April, China celebrated the world’s first electric cargo vessel, officially launching services between the Ports of Nansha and Zengcheng (both in the Guangzhou Municipality) on the Pearl River.

The success of China’s DECA has also inspired South Korea to follow suit. A Special Act on Improvement of Air Quality in Port Areas was passed by South Korea’s cabinet in late 2019. It requires ships to use ultra-low sulfur fuel (0.1 percent sulfur content) when docking at the country’s five main sea ports (beginning on September 1, 2020), and when operating inside its port air quality control zones (beginning on January 1, 2022). Air pollution respects no borders, and the actions of both China and South Korea underscore the importance of advancing regional coordination in tackling shipping sector emissions, which will benefit all countries in the East Asian region.

As a next step, China can consider applying to the IMO for designation of China’s waters as an IMO Emission Control Area (ECA). This would extend the country’s positive influence on international vessels and strengthen its regional leadership. While the amended DECA regulations adopted in 2018 stipulated additional nitrogen oxide and shore power requirements, those requirements mainly apply to China-flagged ships. Designating the entire coast of China as an IMO ECA would grant China the right to impose stricter sulfur oxide and nitrogen oxide emission restrictions on all seagoing ships regardless of the flags they fly. It would also expand the geographical coverage of the emission control area far beyond China’s territorial waters, thereby achieving greater reductions in shipping pollution. Research conducted by Fudan University and the Health Effects Institute shows that an IMO ECA that extends 100 nautical miles from China’s coastline could reduce the premature deaths from ship emissions in the Yangtze River Delta by 77 percent in 2030 relative to 2015, compared to a 50 percent reduction under the current policies.

China can also consider tightening controls on emissions from domestic vessels, on which national authorities can impose stricter requirements than those adopted by the IMO. As shown in the graph below, even the next phase of China’s new marine engine emissions standards, which take effect next year (and which are stricter than the current standards) are more relaxed than the latest standards adopted by the US and the European Union, leaving room for further improvement.

Over the past six years, NRDC, in partnership with research institutes and other NGOs, has been working to provide solutions for strengthening China’s shipping pollution controls and building the government’s enforcement capacity. NRDC has also been supporting universities and research institutes in China with research to help lay the analytical foundation for a potential IMO ECA application. We will continue to support main port cities, including Shanghai, Hong Kong and Guangzhou, in enhancing their green port and shipping plans and improving ongoing efforts, such as incentive programs.

At the national level, we will continue to help China improve the port Environmental Impact Assessment (EIA) process, refine existing mechanisms, and adopt new policies to accelerate the deployment of advanced low- and zero-emission technologies on ships and at ports. The upcoming 14^th Five-Year Plan (2021-2025) offers a great opportunity for China to express its ambition to set national priorities for “greening” the shipping industry. By supporting the formulation of the 14^th Five-Year Plan and the drafting of the Yangtze River Protection Law, NRDC seeks to ensure that progressive national goals are set, and national policies are translated into local actions.

Given the impact of the shipping sector on air pollution, and its effects on human health and the environment, the actions that key players take to tackle shipping emissions are extremely meaningful. While reducing air pollution will and should remain the focus of China’s green shipping efforts, China has started advancing the uptake of “new energy” vessels and shore power, which hold the promise of addressing both climate and air pollution. Global greenhouse gas emissions from the shipping industry are expected to rise from 3 percent to 17 percent by 2050 if not addressed properly. Given the urgency of our climate crisis, decarbonizing shipping is a crucial element of global climate actions. Moreover, as China is one of the world’s most important maritime nations, the positive impact of China’s actions on greening shipping will have lasting consequences not only on human health, but also on the ability of China and the world to reach their Paris climate targets.