Shenzhen in 200m yuan push for green shipping

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.