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Shenzhen in 200m yuan push for green shipping

Thursday, 25 September, 2014

Jing Yang

Mainland city plans to spend 200m yuan a year on cash rebates to encourage firms to switch to low-sulphur fuel while at berth to cut emissions

The Shenzhen government plans to spend 200 million yuan (HK$252.7 million) a year on cash rebates to encourage shipping lines to switch to low-sulphur fuel while at berth, following initiatives taken by Hong Kong, as both cities attempt to rein in vessel exhaust emissions.

The Shenzhen government will subsidise between 75 and 100 per cent of the extra costs incurred in the voluntary at-berth switch to fuel with a maximum 0.5 per cent sulphur content, which is more expensive than regular marine bunker that contains 3 to 3.5 per cent sulphur. The scheme will take effect next month and last for three years.

“We are learning from the experiences in Hong Kong, where companies have volunteered to switch to low-sulphur fuel and the government provides subsidies for extra costs incurred,” Dong Yanze, director of the Construction Management Office of Shenzhen municipality’s Transport Commission, said yesterday.

In 2011, 19 shipping firms came together in Hong Kong to voluntarily switch to low-sulphur fuel at berth, bearing the entire extra bunker costs – an average of US$2 million a year – themselves. Known as the Fair Winds Charter, the endeavour did not receive cash subsidies from the city’s government until September last year, when a three-year grant was rolled out that offset up to 50 per cent of the switch costs.

Bunker bills generally account for 20 to 30 per cent in the operational costs of shipping lines, which have been hit by heavy losses in a protracted industry slump.

The Fair Winds Charter also led to a legislative effort in Hong Kong. The Department of Justice is drafting a bill to mandate a switch to low-sulphur fuel for all ocean-going vessels docking at the city’s terminals, the first such legislation in Asia.

The government initially planned to table the bill to the Legislative Council before the summer recess, aiming for the legislation to come into effect early next year.

“There has been [at least a half-year] delay in the drafting of the legislation,” Undersecretary for the Environment Christine Loh Kung-wai said. “We hope the drafting will finish by the end of the year so that we could put it to Legco as soon as possible. We still want the legislation to come into effect within 2015.”

While mooring at ports, cargo ships contribute to 66 per cent of sulphur dioxide emissions in Shenzhen. In Hong Kong, the proportion is 78 per cent, government statistics show.

Shenzhen was pushing for a sulphur emission control area that would cover the Pearl River Delta by 2018, said Li Shuisheng, deputy director of Shenzhen’s Human Settlements and Environment Commission.

“We hope to set an example for other coastal ports in China and that our efforts will be acknowledged by the central government, eventually leading to nationwide policies,” he said.

An emission control area, which could cover either sulphur or nitrogen dioxide or both, is a designated area that must comply with emission caps set by the International Maritime Organisation under the International Convention for the Prevention of Pollution from Ships. The action, once approved by the maritime body, would be non-discretionary, with emission standards more stringent than in non-emission control areas.

There are currently three such areas in the world – in the Baltic Sea, the North Sea and North America. Asia has lagged behind despite its status as a centre of global shipping traffic.

The steps leading up to the declaration of an emission control area are long and arduous. Hong Kong was collaborating with Shenzhen towards that aim, Loh said.

“2018 is a very aggressive date,” she said. “We are very supportive of the idea to set up [such an area]. But there is a lot of work involved.”

Twenty-three shipping lines signed a joint Green Shipping Shenzhen Declaration yesterday, pledging to contribute to cleaning up the air in the city. It remains unclear how many shipping lines will sign up for the scheme as implementation measures are still being formulated. They are expected to come out by October 1.

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