China is leveraging its dominance in shipbuilding and renewable energy to drive the decarbonization of the global maritime sector, a shift industry executives say is vital for meeting international climate targets.

While the global shipping industry faces steep challenges in cutting emissions, Patrick Kettschau, managing director of Everllence China, points to China's integrated supply chain — from shipyards to alternative fuel production — as a critical solution.

"While decarbonizing the global shipping industry remains a long-term challenge, China, an indispensable partner in this endeavor, is emerging as a driving force in this transformation," he said.

"This is thanks to its strong industrial base, world-leading shipbuilding capacity and growing strength in renewable energy."

As the world's largest consumer and producer of renewable energy, China plays a pivotal role in the transition. Its position as a strategic hub for international shipping and a major investor in clean technologies has attracted multinational collaboration in recent years, he added.

Everllence, which is headquartered in Augsburg, Germany, has been expanding its investment in key technologies, including future fuel engines, hydrogen, carbon capture, utilization and storage (CCUS), and industrial heat pumps, to support the decarbonization and digital transformation of the global shipping industry, he said.

According to Kettschau, partnerships with Chinese companies have been focusing on developing low and zero carbon engine solutions powered by clean fuels like liquefied natural gas (LNG), liquefied petroleum gas (LPG), methanol and ammonia dual-fuel engines.

"These collaborations are advancing next-generation technologies while driving the integration of innovation, local manufacturing and sustainable growth," he said.

The push for greener shipping is reshaping China's energy landscape.

In August, the National Energy Administration formally recognized green liquid fuels, including green ammonia and green methanol, as renewable energy sources, sending a strong signal to the market while aligning with surging global demand.

The global green fuel market, according to market research firm Verified Market Reports, was valued at $70.2 billion in 2023 and is projected to reach $175.1 billion by 2030, with a compound annual growth rate of 12.66 percent.

The International Maritime Organization (IMO) predicts that by 2050, green methanol demand could hit 190 million metric tons, comprising 42 percent of the shipping fuel mix, while fossil fuels shrink to 15 percent.

Beyond the vessels themselves, Chinese utilities are also targeting the carbon footprint of the shipbuilding process.

State Grid Nantong Power Supply Co recently launched a pilot program to create "near-zero carbon "shipyards, implementing precise carbon management across the manufacturing cycle.

By replacing traditional ceramic heating with electromagnetic induction in the welding stage, the project improved heating efficiency by 50 percent and cut power consumption by 60 percent, it said during this year's United Nations climate change conference, or COP30.

In the coating workshop, which accounts for the bulk of energy use, smart temperature controls reduced electricity usage by 30 percent, while further efficiency gains were realized in the assembly stage, where upgrading air compressors cut power use by 40 percent.

The company has also deployed an AI-driven digital energy management platform, allowing shipyards to schedule energy-intensive production during low-cost electricity periods, creating a commercially viable road map for green manufacturing in the heavy industry sector.

Everllence has just unveiled its new, dual-fuel ME-LGIA (liquid gas injection ammonia) engine. The development of this engine is not just a technical achievement. It is another concrete step to advance the green transition and toward a climate-neutral future, said Kettschau.

"With more than a century of history in China, strong local production capabilities in collaboration with our Chinese ship engine licensees, and a shared commitment to a sustainable future, Everllence will continue working hand-in-hand with Chinese partners," he said.

"We are committed to helping achieve the nation's dual carbon goals and accelerate the global shipping industry's green transition, contributing lasting momentum to the world's shift toward a low-carbon energy and industrial system."