China COSCO Holdings received CNY4 billion (USD644 million) from the government to scrap old tonnage and fleet renewal on 30 June, a stock filing of the company said.
The subsidies will have a certain degree of positive impact on the company’s financial result for 2015, the company said.
In April, China COSCO pushed ahead with its fleet scrapping plan by dismantling two container ships and two bulk carriers. The ship breaking in April brought the total scrapping in the first four months to eight container ships and 18 bulk carriers.
In January, the company said it planned a new round of scrapping of old tonnage of 23 vessels with 1.1 million dwt for 2015.
In June, China extended by two years subsidies for domestic shipowners that scrap old tonnage and order new vessels to match the retired tonnage, which were planned to expire by the end of 2015.
In December 2013, the Chinese government unveiled a polished version of subsidy policy to encourage Chinese shipping companies to scrap aged vessels, which is aimed at reduction of glut in capacity and emission cut. Compared with the previous policies issued in 2010, the subsidies were boosted 50% to CNY1,500 per gross tonne. The eligible vessels should be China-flagged and about to be dismantled at 37 approved Chinese scrapyards, according to China’s Ministry of Transport.
The subsidies will be doubled if the shipowners order new tonnage at Chinese shipyards to match the retired tonnage.