Recently, the Ministry of Transport and the National Development and Reform Commission jointly issued the "Implementation Rules for Subsidies on the Scrapping and Renewal of Old Operating Vessels (Revised Version)" (referred to as the "Implementation Rules"). This document further clarifies the scope and standards of subsidies, the application and review process for subsidies, as well as the requirements for managing subsidy funds. The aim is to drive a new round of fleet renewal for old operating vessels and adjust the structure of ship capacity.
According to the "Implementation Rules," the subsidy policy is effective from August 2, 2024, until December 31, 2028. Shipowners may apply for subsidy funds for eligible old operating vessels that are scrapped and for newly built fuel-powered vessels (including those using biodiesel) or new energy/clean energy vessels.
The scrapping and renewal of old operating vessels will adopt differentiated subsidy standards based on vessel type, vessel age, and the propulsion type of the newly built vessel. These standards will be dynamically adjusted according to the shipping market conditions. The subsidy standard for newly built dual-fuel coastal vessels follows that of fuel-powered vessels. The subsidy amount for a newly built inland vessel shall not exceed 40 million yuan. New energy/clean energy vessels that receive subsidies must not alter their propulsion form or undergo modifications that reduce their fuel substitution rate for 10 years after construction is completed.
The "Implementation Rules" specify that applications for subsidies for the scrapping and renewal of old operating vessels should be submitted, along with relevant supporting documents, to the municipal transport authorities at the prefecture level where the vessel's port of registry is located. Effective from the release date of these rules, for applications seeking subsidies for newly built new energy/clean energy vessels, the "Ship Survey Certificate" must be issued after the China Classification Society has conducted the construction survey. All levels of ship survey agencies must strictly adhere to the technical specification requirements and may only issue the "Ship Survey Certificate" after confirming these requirements are met.
The "Implementation Rules" require that shipbuilding and shipbreaking enterprises install network video surveillance equipment at suitable points to conduct full-process video monitoring of the construction and scrapping of vessels included in the list for the scrapping and renewal of old operating vessels. Video data of key time points during the ship scrapping process must be archived at the municipal transport authorities at the prefecture level for reference. Provincial transport authorities, in conjunction with their respective development and reform departments, will closely monitor the allocation and effectiveness of the subsidy funds, regularly conduct random inspections with a proportion no less than 5%, and strengthen the supervision and management of subsidy projects involving funds of 2 million yuan or more.
Implementation Rules for Subsidies on the Scrapping and Renewal of Old Operating Vessels (Revised Version)
Chapter I General Provisions
Article 1 These Rules are formulated to implement the spirit of the "Notice of the State Council on Issuing the 'Action Plan for Promoting Large-scale Equipment Renewal and Consumer Goods Trade-ins'" (Guo Fa [2024] No. 7) and in accordance with the requirements of the "Notice of the Ministry of Transport and Twelve Other Departments on Issuing the 'Action Plan for Large-scale Equipment Renewal in the Transport Sector'" (Jiao Gui Hua Fa [2024] No. 62). Their purpose is to better implement the subsidy policy for the scrapping and renewal of old operating vessels, promote a new round of fleet renewal and adjustment of ship capacity structure.
Article 2 From August 2, 2024, to December 31, 2028 (hereinafter referred to as the "Implementation Period of these Rules"), financial subsidies shall be provided according to the standards stipulated in these Rules for the scrapping and renewal of Chinese-flagged old operating vessels within the territory of the People's Republic of China. Specific arrangements for implementing the subsidies shall be subject to the annual notices.
Article 3 The term "operating vessels" in these Rules refers to vessels legally engaged in domestic transportation in China's coastal or inland waters.
Article 4 Local transport authorities should, in conjunction with development and reform departments, study and formulate work plans for the fund subsidy program for scrapping and renewing old operating vessels. These plans, upon approval by the people's government at the corresponding level, shall be organized for implementation to promote the establishment of a working mechanism and strengthen overall coordination.
Chapter II Subsidy Scope and Standards
Article 5 The shipowner may apply for subsidy funds if the vessel scrapping meets the following conditions:
(1) It is an old operating vessel engaged in domestic coastal and inland water transportation. Specifically: Coastal cargo vessels must have an age between over 20 years and up to 30 years (inclusive). Coastal passenger vessels must have an age between over 15 years and up to 25 years (inclusive). Inland cargo vessels must have an age between over 15 years and up to 30 years (inclusive). Inland passenger vessels must have an age between over 10 years and up to 25 years (inclusive). The vessel age for scrapping is calculated as the period from the vessel's construction completion date to the date of issuance of the "Certificate of Ship Ownership Deregistration," calculated precisely without rounding.
(2) The vessel is a motorized vessel possessing valid certificates or supporting documents for ship survey, ship ownership registration, and ship operation.
(3) The vessel's ownership is clear, and the shipowner holds complete authority to dispose of the vessel. If the vessel to be scrapped has a mortgage registered, the shipowner must negotiate with the mortgagee to terminate the mortgage contract and complete the mortgage deregistration before scrapping. If the vessel to be scrapped is under financial lease or bareboat charter, the shipowner must terminate the contract with the lessee and cancel the corresponding registration before scrapping.
(4) The vessel is completely scrapped within the Implementation Period of these Rules, and the ship ownership deregistration procedures are completed.
Article 6 The shipowner may apply for subsidy funds for a newly built fuel-powered vessel (including those using biodiesel) if it meets the following conditions:
(1) There must be a corresponding old operating vessel scrapped in accordance with Article 5, and the owner and operator of the newly built vessel must be exactly the same as those of the corresponding scrapped vessel.
(2) The newly built vessel shall be a coastal or inland water transport vessel. The applicant must possess domestic waterway transport operation qualifications or have been approved by a county-level or higher local people's government to operate a township or town passenger ferry service. The newly built vessel must comply with relevant policies for transport market access. Newly built inland vessels must also conform to standardized ship type technical standards.
(3) During the Implementation Period of these Rules, the vessel's keel is laid and construction is completed (based on the keel-laying date and construction completion date recorded in the ship survey certificate), and valid certificates or supporting documents for ship survey, ship ownership registration, and ship operation are obtained.
(4) If the gross tonnage of the newly built vessel is greater than that of the corresponding scrapped vessel, the subsidy amount received shall be calculated based on the gross tonnage of the corresponding scrapped vessel. On a voluntary basis, the same shipowner may calculate the subsidy by aggregating the total gross tonnage of all their scrapped vessels and correspondingly the total gross tonnage of all their newly built vessels, or may calculate it on a vessel-to-vessel correspondence basis.
Article 7 The shipowner may apply for subsidy funds for a newly built new energy/clean energy vessel if it meets the following conditions:
(1) The newly built vessel shall be a coastal or inland water transport vessel. The applicant must possess domestic waterway transport operation qualifications or have been approved by a county-level or higher local people's government to operate a township or town passenger ferry service. The newly built vessel must comply with relevant policies for transport market access. Newly built inland vessels must also conform to standardized ship type technical standards.
(2) During the Implementation Period of these Rules, the vessel's keel is laid and construction is completed (based on the keel-laying date and construction completion date recorded in the ship survey certificate), and valid certificates or supporting documents for ship survey, ship ownership registration, and ship operation are obtained.
(3) The vessel's main propulsion should be powered by one of the following: Liquefied Natural Gas (LNG) single fuel, Methanol single fuel, Hydrogen fuel power, Ammonia fuel power, Pure battery power (excluding lead-acid batteries), or dual-fuel systems with LNG and fuel oil achieving a fuel substitution rate over 60%, or methanol and fuel oil achieving a fuel substitution rate over 50%.
Article 8 Differentiated subsidy standards are implemented for the scrapping and renewal of old operating vessels based on vessel type, vessel age, and the propulsion type of the newly built vessel. These standards are dynamically adjusted according to shipping market conditions. The subsidy standards and calculation methods are detailed in Annex 1. The subsidy standard for newly built dual-fuel coastal vessels follows that of fuel-powered vessels. The subsidy amount for a newly built inland vessel shall not exceed 40 million yuan.
Article 9 Projects for the scrapping and renewal of old operating vessels that have already applied for or received relevant fund support from other sectors under the National Development and Reform Commission or from other national departments are not eligible for duplicate applications. Projects from entities listed on the joint punishment list for dishonest conduct or the severe list for production safety are not eligible for application. New energy/clean energy vessels that receive subsidies must not alter their propulsion form or undergo modifications that reduce their fuel substitution rate for 10 years after construction is completed.
Chapter III Subsidy Application and Review
Article 10 Shipowners applying for scrapping subsidies should submit their application, along with the "Application Form for Subsidy Funds for Scrapping and Renewal of Old Operating Vessels" (Annex 2), to the municipal transport authorities at the prefecture level where the scrapped vessel's port of registry is located, during the Implementation Period of these Rules. Shipowners applying for subsidies for newly built vessels should submit their application, along with the "Application Form for Subsidy Funds for Scrapping and Renewal of Old Operating Vessels," to the municipal transport authorities at the prefecture level where the newly built vessel's port of registry is located, during the Implementation Period of these Rules. For coastal vessels where the operator's registered address (e.g., in Beijing) differs from the vessel's port of registry, the application shall be submitted to the transport authorities at the location of the operator's registered address. The same applies below.
Article 11 The following supporting documents must be submitted to the municipal transport authorities at the prefecture level of the vessel's port of registry when applying for subsidy funds for the scrapping and renewal of old operating vessels:
(1) For applying for scrapping subsidies: Before vessel scrapping, submit the completed "Application Form for Subsidy Funds for Scrapping and Renewal of Old Operating Vessels" and provide the "Ship Operation Certificate" (for township/town passenger ferries, provide the relevant certificate issued by the county-level or higher local people's government), "Certificate of Ship Ownership Registration," "Ship Survey Certificate," "Power of Attorney from Ship Co-owners," and "Letter of Commitment Regarding the Vessel to be Scrapped." After scrapping is completed, additionally submit the "Ship Scrapping Completion Report" (Annex 3) and the "Certificate of Ship Ownership Deregistration."
(2) For applying for subsidies for a newly built fuel-powered vessel: In the planned year of construction completion, submit the "Application Form for Subsidy Funds for Scrapping and Renewal of Old Operating Vessels." After construction is completed, submit the newly built vessel's "Certificate of Ship Ownership Registration," "Ship Survey Certificate," "Ship Operation Certificate" (for township/town passenger ferries, provide the relevant certificate), "Power of Attorney from Ship Co-owners," and the "Ship Scrapping Completion Report" of the corresponding scrapped vessel.
(3) For applying for subsidies for a newly built new energy/clean energy vessel: In the planned year of construction completion, submit the "Application Form for Subsidy Funds for Scrapping and Renewal of Old Operating Vessels." After construction is completed, submit the newly built vessel's "Certificate of Ship Ownership Registration," "Ship Survey Certificate," "Ship Operation Certificate" (for township/town passenger ferries, provide the relevant certificate), and "Power of Attorney from Ship Co-owners." For applications seeking subsidies for newly built new energy/clean energy vessels, the "Ship Survey Certificate" must be issued after the China Classification Society has conducted the construction survey. For vessels whose construction survey was conducted by a local ship survey agency before the release date of these Rules, maritime administrations shall strengthen guidance and supervision. All levels of ship survey agencies must strictly adhere to technical specification requirements and may only issue the "Ship Survey Certificate" after confirming these requirements are met.
Article 12 After receiving the application materials for subsidy funds for the scrapping and renewal of old operating vessels, the municipal transport authorities at the prefecture level shall, in conjunction with the development and reform, maritime, and ship survey departments at the same level, complete the review within 10 working days of accepting the application. They shall provide the applicant with preliminary feedback on whether the application is approved and report the results to the provincial transport authorities and development and reform departments. If the applicant's submitted materials are truthful, complete, and meet the requirements of these Rules, the application shall be approved. If the submitted materials are incomplete or unclear and cannot be verified, the accepting unit shall inform the applicant of the information required for correction, and the applicant shall provide the necessary supplementary information accordingly. When applying for scrapping subsidies, the applicant must reasonably fill in the estimated scrapping completion time based on actual circumstances. This time shall not be earlier than the last day of the month following the current batch's application submission date, nor later than December 31 of that year. The municipal transport authorities shall calculate the subsidy amount based on the vessel age coefficient corresponding to the estimated scrapping completion time. If a vessel's age coefficient decreases to a lower tier between the last day of the month following the provincial development and reform and transport authorities' submission of the project list and within 30 days (inclusive) after the national authorities issue the project list, and if the vessel is scrapped and its ownership certificate deregistered within 60 days (inclusive) after the national project list is issued and within the same calendar year, the subsidy may be calculated based on the vessel age coefficient before the decrease.
Article 13 After the provincial people's government approves the list of projects for the scrapping and renewal of old operating vessels and upon the National Development and Reform Commission and the Ministry of Transport issuing the project list, the municipal transport authorities at the prefecture level of the vessel's port of registry shall notify the applicant and then carry out the on-site scrapping supervision procedures. No subsidy will be granted if the on-site scrapping supervision procedures are not followed and the applicant scraps the vessel on their own. Before scrapping, the municipal transport authorities of the port of registry shall, together with the maritime administration and the shipowner, conduct on-site supervision at the scrapping site. They will inspect and cancel the relevant certificates, verify the actual vessel, and take videos and photographs. After scrapping is completed, the municipal transport authorities of the port of registry, together with the maritime administration, shall conduct an on-site acceptance inspection and jointly prepare the "Ship Scrapping Completion Report." The criteria for determining scrapping completion are that the main structure of the vessel has been dismantled irrecoverably, and the main engine and generator sets have been removed from the vessel.
Chapter IV Subsidy Fund Management and Disbursement
Article 14 The municipal development and reform department at the prefecture level, in conjunction with the transport authorities at the same level, shall compile an application document for funds for the scrapping and renewal of old operating vessels (including the project list) based on the subsidy fund applications and submit it as required to the provincial development and reform department and transport authorities.
Article 15 Provincial development and reform departments, in conjunction with transport authorities, shall organize the review of the fund application documents and project lists submitted by their respective regions. After obtaining approval from the people's government at the same level, they shall submit the official application documents to the National Development and Reform Commission (NDRC) and the Ministry of Transport (MOT), indicating in the application that provincial government approval has been obtained. Simultaneously, they shall uniformly enter and submit the information through the "Ultra-Long-Term Special Government Bonds" module of the National Major Project Library (selecting the transport category for project type). Provincial development and reform departments shall bundle eligible projects by province for application, clearly specifying in each "bundle" detailed information such as the project unit and construction content for each specific project, as well as the project unit and its responsible person, and the direct daily supervision unit and its supervisor. The Ministry of Transport will lead the preliminary review of the fund application documents and project lists, focusing on verifying information such as vessel type, gross tonnage, and subsidy amount, and will feed back the results to the NDRC. After screening and review by the NDRC in conjunction with the MOT, the NDRC will officially issue the project list for the scrapping and renewal of old operating vessels to provincial development and reform departments and transport authorities, with copies to the Ministry of Finance, MOT, and National Audit Office. Relevant information will also be pushed through the National Major Project Library. The Ministry of Finance will disburse government bond funds according to the project list. The disbursement process for ultra-long-term special government bond funds must comply with the relevant requirements for "Two New" projects.
Article 16 For a scrapped vessel included in the project list, after scrapping is completed, provide the "Ship Scrapping Completion Report" and the "Certificate of Ship Ownership Deregistration" to the municipal transport authorities at the prefecture level. For a newly built vessel included in the project list, after construction is completed, provide the "Certificate of Ship Ownership Registration," "Ship Survey Certificate," "Ship Operation Certificate," and "Power of Attorney from Ship Co-owners" to the municipal transport authorities at the prefecture level. For a newly built fuel-powered vessel, also provide the "Scrapping Completion Report" of the corresponding scrapped vessel.
Article 17 After reviewing the subsidy fund application materials, the municipal transport authorities at the prefecture level shall report them to the provincial transport authorities for review and approval. Upon approval, the subsidy funds shall be disbursed according to procedures. The disbursed state subsidy funds shall not exceed the amount approved by the state.
Chapter V Supervision and Management
Article 18 The Ministry of Transport and the National Development and Reform Commission shall, according to their respective responsibilities, guide and supervise local relevant departments in conducting guidance, supervision, and inspection of the subsidy fund work for the scrapping and renewal of old operating vessels, implement supervision and management, and review the project lists reported by provinces. Provincial transport authorities are the primary responsible entities for project review and organization of implementation, verifying whether project-related certificates are complete, valid, and whether fund disbursement conditions are met. Provincial development and reform departments are responsible for consolidating the project lists reported by cities and, in conjunction with transport authorities, organizing project implementation. Municipal transport authorities and development and reform departments at the prefecture level are responsible for leading project review in accordance with these Rules, focusing on verifying project authenticity, document completeness, project compliance, and subsidy amount accuracy. They are also responsible for implementing on-site scrapping supervision in conjunction with maritime departments.
Article 19 The municipal transport authorities and development and reform departments of the vessel's port of registry, as well as provincial transport authorities and development and reform departments, shall strictly review the subsidy fund applications according to the subsidy scope and standards stipulated in these Rules. Maritime administrations are responsible for verifying the ownership registration certificate information of scrapped and newly built vessels. Ship survey agencies are responsible for verifying ship survey information.
Article 20 Shipbuilding and shipbreaking enterprises shall install network video surveillance equipment at suitable points to conduct full-process video monitoring of the construction and scrapping of vessels included in the list for the scrapping and renewal of old operating vessels. Video data of key time points during the ship scrapping process shall be archived at the municipal transport authorities at the prefecture level for reference.
Article 21 Provincial transport authorities, in conjunction with development and reform departments at the same level, shall closely monitor the allocation and implementation effectiveness of subsidy funds, regularly organize random inspections with a proportion no less than 5%, and strengthen supervision and management of subsidy projects involving funds of 2 million yuan or more.
Article 22 Directly affiliated maritime agencies shall strengthen quality supervision of surveys for newly built vessels. Subsidy funds for newly built vessels shall not be arranged if the vessels do not meet legal, regulatory, or technical specification requirements.
Article 23 For enterprises, individuals, etc., that violate these Rules and obtain subsidy funds through false reporting, fraudulent claims, or other means, and upon verification, the relevant dishonest conduct shall be recorded in the subject's credit record, shared to the National Credit Information Sharing Platform, and the relevant responsible persons or units shall be dealt with as follows:
(1) If an applicant falsifies information regarding scrapped vessels or fails to meet vessel scrapping requirements, the municipal transport authorities at the prefecture level shall recover the disbursed subsidy funds, disqualify the applicant from future applications, and handle the matter in accordance with the "Regulations on Punishment for Financial Violations" and other relevant laws and regulations.
(2) Shipbuilding or shipbreaking enterprises that assist other enterprises or individuals in obtaining financial subsidies through false reporting, fraudulent claims, etc., or fail to install video surveillance equipment as required by Article 20 of these Rules to monitor the construction or scrapping process, shall be prohibited from participating in projects for the scrapping and renewal of old operating vessels.
(3) For administrative institutions and their staff who assist enterprises or individuals in obtaining financial subsidies through false reporting, fraudulent claims, etc., they shall be referred to the discipline inspection and supervision departments for accountability according to the "Civil Servant Law of the People's Republic of China," the "Supervision Law of the People's Republic of China," and other laws and regulations. If suspected of a crime, they shall be transferred to judicial authorities.
(4) If municipal transport authorities and development and reform departments at the prefecture level fail to strictly vet application materials and do not promptly discover cases of obtaining subsidy funds through false reporting, fraudulent claims, etc., the application eligibility for that region shall be revoked.
Article 24 If modifications are made to a newly built new energy/clean energy vessel in violation of Article 9 of these Rules, ship survey agencies shall not accept survey applications for such vessels. For unauthorized modifications, the municipal transport authorities at the prefecture level shall recover the disbursed subsidy funds.
Chapter VI Supplementary Provisions
Article 25 These Rules shall take effect from the date of issuance.
Article 26 Provincial transport authorities and development and reform departments may formulate specific implementation measures based on these Rules and in accordance with actual conditions, and report them to the Ministry of Transport and the National Development and Reform Commission for record.
