In response to the State Council’s action plan to promote large-scale equipment renewal and the replacement of old consumer goods with new ones, the Ministry of Transport, in conjunction with the National Development and Reform Commission, officially issued the “Detailed Rules for the Implementation of Subsidies for the Scrap and Update of Old Vessels” (hereinafter referred to as the “Detailed Rules”), aiming to promote the renewal and upgrading of old vessels and optimize the structure of shipping capacity through financial subsidy policies.

The Detailed Rules clarify the implementation time, targets, and standards of the subsidy policy, stipulating that from the date of publication until December 31, 2028, financial subsidies will be provided for the scrapping and renewal of Chinese old transport vessels that meet the conditions. The subsidy targets include old transport vessels engaged in domestic coastal or inland transportation, within the specified age range, as well as newly built fuel-powered and new energy clean energy vessels.

Specific subsidy conditions include the vessel’s age, type, power source, etc., and require the vessel owner to have the corresponding operational qualifications and to complete the dismantling and construction work during the implementation period of the Detailed Rules. For newly built vessels, if their total tonnage exceeds that of the dismantled vessels, the subsidy amount will be calculated based on the total tonnage of the dismantled vessels. In addition, the Detailed Rules also stipulate differentiated subsidy standards to encourage the construction of new energy and clean energy vessels.

The application and review process for subsidy funds has also been clarified, requiring vessel owners to apply to the competent municipal transport authority where the vessel’s port of registry is located, and submit relevant proof materials. The review work is led by the competent municipal transport authority, in conjunction with department of development and reform, department of maritime safety administration, and department of ship inspection, etc.

The Detailed Rules also emphasize the importance of supervision and administration, requiring relevant departments to strictly review the authenticity and accuracy of the application materials, and to track and inspect the use of subsidy funds. Acts of defrauding subsidy funds in violation of the legal provisions will be dealt with in accordance with laws and regulations.

The issuance of these Detailed Rules is an important measure by the Chinese government to promote green development of the transportation industry and improve the safety and efficiency of shipping. It is expected to effectively stimulate market vitality and promote the healthy development of the shipbuilding and shipping industries.