CHINA is exploring the idea of adding shipping into a national carbon trading market as a way of decarbonising the country’s maritime sector, according to a government official. 

The talks are at an early stage, with no clear pathway and timetable for the implementation of the measure, said China Maritime Safety Administration head of hazards and pollution control department Xu Jixiang.

Studies are being carried out on the “application of greenhouse gas emission reduction tools, including carbon trading, a differentiated carbon taxation scheme and carbon credits, to the shipping sector,” he said.

Mr Xu was speaking at the Green Shiptech China Congress 2021 in Shanghai organised by Ridge.

The move comes against the backdrop of Beijing’s pledge to decarbonise the country’s economy and the pressing need at the international level for cutting greenhouse gas emissions generated by ships.  

China expects carbon emissions to peak by 2030 and reach carbon neutrality by 2060.

Large state-owned companies, especially those in steelmaking, power generation, petrochemical and coal production, have already been asked to comply.

One of the major initiatives is to establish a country-wide carbon trading market.

Due to be launched this month, it will initially cover power generators and be gradually extended to other industries, Chinese premier Li Keqiang told a recent State Council meeting.

Mr Xu said the CMSA wanted to “actively conjoin” that market with shipping’s emission cutting, as part of the policy efforts to make the sector “green and clean”.

The European Commission is already expected to unveil its final proposals for including shipping in the European Union’s Emissions Trading Scheme, which could lead to a substantial increase in costs not only for intra-Europe but also international seaborne trade.

Mr Xu declined to comment on whether EU’s plans will set a precedent for the world’s largest trading nation, but said he was aware of the controversy drawn by the unilateral move.

Other decarbonisation measures being considered by the CMSA include creating a roadmap to carbon peak and carbon neutrality for the county’s shipping companies, ensuring that shipbuilders meet the International Maritime Organisation’s requirements for energy efficiency designs, and developing green ports equipped with shore power and clean energy facilities.

The administration will also work with other government bodies to roll out policies that encourage the research and use of alternative marine fuels, such as liquefied natural gas, ammonia, hydrogen and batteries.

Mr Xu said that China will speed up the construction of LNG fuelling stations for ships.

Domestic efforts aside, he said China needs to “actively” participate the negotiations at the IMO and within the United Nations Framework Convention on Climate Change, to guide the making of international rules and “form fair and reasonable institutional arrangements.”