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China poised to become world's top shipbuilder

China will overtake Japan and South Korea to become the world's largest shipbuilding nation by 2015 with total capacity expected to expand threefold, partly driven by the country's insatiable thirst for energy, according to Det Norske Veritas (DNV), one of the world's largest maritime classification groups.

'For national security reasons China has stipulated that at least half of its crude oil imports must be carried on Chinese ships which will mean a huge increase in demand for very large crude carriers [supertankers],' DNV president and chairman Henrik Madsen said yesterday.

Mr Madsen said China would build between 40 and 50 supertankers in the next five years in addition to the 20 or so that have already been ordered for delivery by 2009.

Each supertanker measures at least 350 metres, weighs more than 300,000 dead weight tons and costs about US$130 million to build.

'Korean and Japanese shipbuilders will not give up easily and China still has to focus on quality, improving delivery times and establishing sound management systems,' Mr Madsen said. 'The industries that support shipyards will also have to be improved.'

Norway-based DNV is a non-profit foundation that mostly reinvests revenue into research and development, increasingly in the area of renewable energy and climate change mitigation.

China imported 16 per cent more crude oil in the first half of the year and Chinese oil imports would account for 13 per cent of the global oil trade in five years, up from 5 per cent now, Mr Madsen said.

In addition to classifying ships, DNV provides certification in various sectors, including carbon credit licensing under the Kyoto Protocol agreement and the ISO industry standard series.

Companies that replace a source of carbon emissions with a more efficient alternative - for example by building a wind farm to replace a coal-fired power plant - can apply for certified carbon credits which they then sell on international exchanges or directly to polluting firms in other countries.

Mr Madsen said DNV, which is approved by the United Nations to issue carbon credits, controls 50 per cent of this market globally and 70 per cent of the nascent Chinese market.

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