Shipbuilder Rongsheng joins global green trend

The green revolution is not only gathering pace in the aviation and car industries, it is also encouraging shipyards to build vessels that are more environment-friendly and comply with the increasingly rigid regulations on ships globally.

China Rongsheng Heavy Industries Group Holdings, for one, is making its mark with plans to build hybrid ships that can be fuelled by both oil and liquefied natural gas.

'Low-carbon economy is a global trend,' said Chen Qiang, an executive director of Rongsheng, the largest private shipyard on the mainland which listed on the Hong Kong stock exchange in November last year.

'In the 12th five-year plan, which starts this year, environmental protection is also one of Beijing's top priorities.'

LNG could cut down greenhouse gas emissions by 40 to 50 per cent, compared with traditional bunker fuel.

Rongsheng has teamed up with two international marine engine manufacturers - Finland's Wartsila and Germany's Man Diesel & Turbo, a member of the Man Group - to study and develop ships with dual fuel propulsion systems or solely powered by LNG, Chen said.

The company said they were ready to build clean ships if shipowners wanted them.

One of the major obstacles for shipowners ordering hybrid or LNG-powered vessels is the lack of LNG supply at ports. There is only one LNG terminal on the mainland, in Fujian. But that is about to change as more than 12 LNG terminals are being built by oil and gas giants PetroChina and CNOOC.

Banking on the growing popularity of the low-carbon thrust, Rongsheng has also worked with international ship classification bodies such as Lloyd's Register and Det Norsk Veritas to increase the fuel efficiency of diesel engines. Last year, Rongsheng launched a new type of ship, a 78,000 dwt bulk carrier, which can cut daily fuel consumption by one-sixth to one-seventh. Orders for more than 40 such fuel-efficient vessels will be delivered in two years.

'The demand for low-emission ships will see stellar growth on the mainland from 2013 as China will inevitably adopt this global trend,' Chen said.

Rongsheng builds a large variety of vessels, ranging from 78,000 dwt bulk vessels and 156,000 dwt suezmax tankers to 400,000 dwt large ore carriers. This year, the shipyard will tap the container ship market by offering 10,000 teu vessels.

In the first 11 months of last year, the company's outstanding order book exceeded 4 million dwt, the third-biggest order book among mainland shipbuilders.

It was boosted by a US$1.6 billion order for 12 large ore carriers that was placed by Brazilian miner Vale in August 2008.

The Vale deal is being supported by the Export-Import Bank of China and the Bank of China, which signed a credit line in September last year to provide up to US$1.23 billion to finance the construction of the ships.