Investment Rating - Industry Rating: Overweight [1] Core Viewpoints - The shipping industry's carbon reduction is urgent, and green methanol is expected to play a key role as a low-carbon fuel solution. Green methanol is a low-carbon or zero-carbon liquid fuel produced from renewable resources, with lifecycle carbon emissions potentially approaching zero or even negative [3][4][17]. - The International Maritime Organization (IMO) is expected to pass a net-zero emissions framework in October 2025, which will promote the development of the green methanol industry. The framework requires a 20% reduction in carbon emissions by 2030 compared to 2008 levels and aims for net-zero emissions by around 2050 [4][20]. - China is actively promoting the application of green methanol, with policies and infrastructure for port refueling being accelerated. By 2035, the goal is to establish a green fuel supply system for transportation [5][34]. Summary by Sections 1. Green Methanol as a Key to Shipping Emission Reduction - Green methanol is a low-carbon liquid fuel with superior performance characteristics, including high combustion efficiency and low emissions of sulfur oxides and particulate matter [17][18]. - The shipping industry faces significant pressure to reduce emissions, with the IMO's net-zero emissions framework highlighting the need for zero or near-zero carbon fuels [19][21]. - China's policies are aimed at accelerating the transition to green methanol, with several ports already initiating refueling operations [5][34]. 2. Industrialization of Green Methanol - The production of green methanol is in its early stages, with significant expansion expected. Current production capacity is only 1.7 million tons, but it is projected to reach 39.3 million tons by 2030 [6][39]. - The main production methods include electrochemical and biomass routes, with biomass methanol currently having lower costs [6][46]. - China is leading in green methanol projects, with over 60 projects underway, accounting for 51% of global renewable methanol projects [7][39]. 3. Related Listed Companies - Companies with green methanol production capacity or technology reserves include Fuxie Environmental Protection, Goldwind Technology, and Jiazhe New Energy [9][11]. - Engineering and equipment companies involved in the green methanol sector include Donghua Technology and China Chemical [9][11].

Core Viewpoint - The discussion during the Capital Link conference highlighted the need for a unified global regulatory framework to drive substantial changes in the shipping industry, particularly regarding fleet renewal and alternative fuels [3][9]. Regulatory Framework - The upcoming international regulatory framework is seen as a "milestone" that could provide long-awaited global guidance for the industry, potentially accelerating the energy transition [3]. - A unified carbon pricing and certification system is deemed essential for shipowners' investments, with lessons learned from the EU ETS implementation [5]. - The complexity of new regulations raises concerns about compliance difficulties, leading some shipowners to face potential fines to maintain operations [5][9]. Fuel Selection - The topic of fuel selection is contentious, with a focus on transitional fuels as practical solutions compatible with existing fleets [5]. - The "chicken and egg" dilemma regarding alternative fuel production and regulatory certainty is a significant concern for shipowners and fuel suppliers [7]. - A new responsibility framework and insurance arrangements are necessary for the transition to alternative fuels, as the shipping industry has long relied on by-products from the refining industry [7]. Shipowner Strategies - Shipowners exhibit cautious attitudes towards new ship orders, with significant uncertainty suppressing new orders, particularly in the tanker and bulk markets [9]. - Some companies are opting for stock buybacks and cash retention instead of placing new orders, citing high costs and regulatory risks associated with traditional fuel vessels [9]. - The industry is leaning towards a "gradual transition" rather than aggressive transformation, waiting for clearer policies and fuel market signals before making large-scale fleet updates [9]. Consensus and Future Outlook - Despite differing views on fuel pathways and investment timing, there is consensus on the necessity of a unified and enforceable regulatory system for the shipping industry's green transition over the next decade [9][10]. - Energy efficiency improvements are prioritized as more practical than large-scale alternative fuel adoption before 2030 [10]. - A multi-pathway approach involving LNG, methanol, ammonia, and other fuels is recognized as essential, as the industry cannot rely on a single fuel for its transition [10]. - Uncertainty continues to delay investments from both shipowners and fuel suppliers, who are awaiting clearer policy and market signals [10].

Core Viewpoint - The development of green methanol as a fuel for shipping is gaining momentum, with Shanghai positioning itself as a key hub for green fuel supply and infrastructure, aiming to meet international emissions reduction targets and enhance its role in global shipping [3][5][31]. Group 1: Green Methanol Development - The first methanol dual-fuel container ship, "COSCO Shipping Yangpu," has successfully refueled with 1,000 tons of domestically produced green methanol at Shanghai Yangshan Port, marking a significant step in establishing a complete domestic green methanol supply chain [1][6]. - The International Maritime Organization (IMO) has approved a framework for net-zero emissions in global shipping, requiring ships over 5,000 tons to reduce emissions in phases, aiming for net-zero by 2050 [3][4]. - Shanghai aims to establish a green fuel supply system by 2030, with plans for a green fuel refueling service center and a green fuel trading center [4][5]. Group 2: Infrastructure and Capacity - Shanghai Port has become one of the few ports globally capable of simultaneously providing green methanol and LNG refueling services, with a significant increase in methanol refueling operations in recent years [6][8]. - The port has received nine applications for methanol refueling from ocean-going vessels this year, with a total refueling volume exceeding 32,500 tons, a substantial increase from just over 500 tons last year [6][9]. - The domestic green methanol production capacity is projected to reach approximately 12 million tons by 2030, accounting for nearly 50% of the global market [9][12]. Group 3: Challenges and Solutions - The green fuel sector faces a "supply-demand dual challenge," where a lack of stable supply discourages investment from shipowners, while unclear demand prevents producers from expanding [10][19]. - The cost of green methanol production is currently high, with estimates suggesting a potential increase of 340% to 350% in fuel costs when transitioning from traditional low-sulfur fuel to green methanol [14][15]. - The industry is exploring solutions to reduce costs, such as optimizing production processes and establishing centralized biomass resource utilization [17][18]. Group 4: Collaborative Efforts and Future Outlook - Collaborative projects among state-owned enterprises and local companies are underway to build a comprehensive green methanol supply chain, covering production, transportation, and refueling [9][22]. - The establishment of green shipping corridors, such as the Shanghai-Los Angeles corridor, aims to facilitate the adoption of green fuels and reduce emissions along key trade routes [26][28]. - The growth of green fuel demand and the establishment of stable supply chains are expected to create new economic opportunities and reshape the energy landscape [31].