50 years of partnership have made China a sustainable shipbuilding powerhouse

Turbocharger License Agreement with Sixth Ministry of Machine-building Industry /
China National Technology Import Corporation (CNTIC), signed Dec. 31, 1978

Then, in the 1990s, China opened its doors to foreign investment, and in 2005, ABB and the CSSC established a joint venture, now Accelleron Turbo Systems (Chongqing) Ltd., to manufacture marine turbochargers in Chongqing, a large inland city connected to Shanghai by the Yangtze River. Today, that facility is a major Accelleron manufacturing center, building all of its parts according to original Swiss specifications. It also manufactures turbochargers for land-based applications in trains, data centers, and power plants, including trigeneration (combined cooling, heat and power).

“The joint venture has been a major turning point and success story for Accelleron. It enabled us to evolve from a service operation to address the entire supply value chain.” says Allan. In fact, Accelleron’s Chinese production hub is now the sole global manufacturer for the company’s low-speed turbochargers. Given the concentration of shipbuilding in China, South Korea, and Japan, this production localization makes transportation faster and less costly, and significantly reduces environmental impact.

China now leads the genesis of a sustainable global maritime economy

Looking forward, Allan believes that China’s shipbuilding business will grow even further, as decarbonization creates a rising tide of new ship orders. The order books are growing especially fast for dual fuel ships that are more efficient and digitalized, and use next-generation turbochargers and fuel injection systems designed to operate with carbon-neutral fuels. 

With some companies seeking to replace 50 to 60% of their global fleets in the next years, that demand is exceeding the capacity of many shipyards, especially with regard to talent acquisition. In contrast, China’s shipyards are rising to the challenge, “I have talked to many of our shipyard leaders, and they are confident that they can get the talent to expand capacity. Largely because China has a wealth of qualified engineers who are excited about building the world’s most innovative, sustainable ships and really transforming the industry,” says Allan.

In the meantime, the service business is also expanding, driven by a backlog of new build orders in the thousands, and an average ship age of 12.6 years in the existing global fleet.⁷ The European Union’s new carbon penalties – in the Emissions Trading System (ETS)⁸ and FuelEU Maritime⁹ regulations – are putting additional pressure on shipping companies to find new ways of reducing emissions in older ships. 

Service upgrades like Engine Part Load Optimization (EPLO) that combine state-of-the art turbocharging component upgrades with engine optimization at lower sailing speeds can lift the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII) ratings of older vessels in a single port stay. And the orders for such upgrades are also starting to fill the books at China’s repair yards. 

“With over 100,000 commercial vessels in operation,¹⁰ we have to upgrade the existing fleet, if we want to meet the IMO targets. We can’t rely on new builds: they will come too late,” says Allan. “Even if new emissions regulations are being instituted in other regions, Chinese shipyards are doing a lot of the work to help ships comply with those standards.”

China also holds the key to a big part of the carbon-neutral fuel infrastructure

Already, China is world’s largest hydrogen producer, delivering around a quarter of the world’s supply. Although most of this is “blue hydrogen,” produced using fossil fuels, the nation’s commitment to renewable energy and net zero emissions by 2060 should see that shift to green hydrogen, over time. Since green hydrogen is the basis for green methanol and ammonia, the marine industry’s two most promising carbon-neutral fuels, China will be in a strong position to supply those fuels to shipping companies. Allan notes, “It’s a pragmatic as well as a sustainable solution. China has many natural resources, but it is not an oil-rich country. The development of a robust carbon-neutral fuel infrastructure will reduce the country’s reliance on fossil fuel imports, while accelerating decarbonization at scale.”

Protecting the data connection behind it all

While the lion’s share of Accelleron’s business in China revolves around the  maritime industry, the company is also increasing support for data centers. Considering the world’s reliance today on data – for essential services like healthcare, utilities, and security – backup power solutions have become vital to preventing interruptions that could have serious consequences. 

It is a critical vulnerability that demands the utmost attention and protection. That protection comes in the form of emergency generators (turbocharged engines) that can come to life in a moment. This makes powerful, efficient, and reliable turbochargers indispensable. 

Allan says, “We continue to see the growth of the data centers – they are fundamental to the way we live and communicate today. People have no patience for data outages. If a service doesn’t respond instantly, people will abandon it, and choose the next one. So, while we are safeguarding health and safety with by keeping data centers online, we are also supporting business outcomes for the data centers themselves.”

50 years of leadership, past and future

“During my 30 years at Accelleron, I've witnessed incredible transformation, as markets opened, and East-West partnerships expanded,” says Allan. “Our collaborations in China have helped drive the phenomenal growth of China's shipbuilding market. Now, we are using that foundation to build a more sustainable global maritime economy. From new builds to existing vessels, we are ready for this transition, and I look forward to the next 50 years.”