Working Paper
Economic benefits of building zero-emission capable vessels in East Asia
This paper examines the economic potential for major shipbuilding nations—China, Republic of Korea, and Japan—in capturing the first mover advantage for the transition to zero-emission capable vessels (ZECVs). As the international shipping industry aims for net-zero greenhouse gas emissions by 2050, ZECVs will play a crucial role in achieving this goal. Furthermore, as ships have a slow turnover rate with an average 25-year life span, shipbuilding countries will need to scale up production rapidly to ensure that new vessels can accommodate fuels with near-zero GHG emissions.
Key Findings:
- Opportunities for substantial revenue increases: ZECV construction could increase shipbuilder revenues from building new types of propulsion systems by 86% to 452% compared to conventional vessels.
- Country-specific gains: Based on current market shares, China could see additional revenues of $3.1billion–$15.9 billion, Republic of Korea $1.5 billion–$6.2 billion, and Japan $2.1 billion–$12.5 billion by 2030.
- Long-term potential: If ZECV uptake grows at a constant rate between 2026 and 2030, these countries could collectively earn additional revenues ranging from $14.2 billion to $77.4 billion.
Implications
The transition to ZECVs presents a significant economic opportunity for shipbuilding nations. First movers in ZECV technology could gain a competitive advantage and potentially capture a larger share of this lucrative market.