Financing zero-emission vessel shipbuilding in China

China’s role as the world’s leading shipbuilder is crucial in the global transition to zero-emission vessels (ZEVs). There is widespread agreement that ZEVs must begin operating on deep-sea routes by 2030 if the shipping industry is to help keep global warming well below 2°C. However, little information is available about the costs of ZEV shipbuilding and policies that would support ZEV adoption. This paper quantifies the additional cost of constructing ZEVs compared to conventional ships and evaluates how carbon pricing could help finance ZEVs in China.

The analysis shows how revenue from international carbon pricing proposals could cover 20.8% to 73.8% of the additional cost of building ZEVs. The study emphasizes that carbon revenue would peak in the decade from 2030–2040, making this the critical time to jumpstart ZEV shipbuilding.

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