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China trade boom choking its port cities with smog: Report

A haze of pollution as the sun sets over the harbour in Hong Kong as thousands of ships burn dirty fuels that have turned the once-fragrant harbor into a city often covered in smog with air pollution killing over 3,000 people yearly.
Phillippe Lopez | AFP | Getty Images
A haze of pollution as the sun sets over the harbour in Hong Kong as thousands of ships burn dirty fuels that have turned the once-fragrant harbor into a city often covered in smog with air pollution killing over 3,000 people yearly.

China's leaders have pledged to contain the air-choking pollution churned out by the booming economy's cars, factories and power plants.

But much of the foul air generated by its heavily export-driven economy is coming from a widely overlooked and virtually unregulated source: The ships carrying those exports to market.

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With some 30 percent of the world's container volume, China's ports are a major source of soot and sulfur dioxide—among the worst air pollutants generated by burning diesel fuels, according to a report published Wednesday by the Natural Defense Resources Council .

"These emissions are known to cause cancer and are associated with a wide range of respiratory and cardiovascular illnesses," said the report.

Tighter regulations and cleaner-burning diesel technology have been rolled out in the past few decades in most of the developed world. Ships traveling in international waters are regulated by the International Maritime Organization, which has put emission controls in America and Europe, where ships use low-sulfur marine fuels. But those regulations don't apply to Asia.

China's booming economy has left the latest regime with a host of environmental problems, from fouled rivers to thick smog enveloping its largest cities. But with signs of the economy slowing, Beijing leaders are looking for ways to further stoke growth. That could put a damper on measures to raise costs for shippers.

But air pollution is already taking a human toll, contributing to an estimated 1.2 million premature deaths in China in 2010, according to the report.

As a result, Beijing faces public pressure to curb smog in booming port cities that have become major population centers. China's seven largest port cities, including Hong Kong, are home to some 85 million people.

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Most Chinese ships use cheaper, so-called residual fuel, which is high in sulphur and creates exhaust with high levels of diesel soot and nitrogen oxides.

The Chinese government recently adopted new air quality standards, but so far only a few port cities have begun to crack down on emissions from ships and other transportation vehicles and equipment. Hong Kong and Shenzhen have announced plans to require low-sulfur marine diesel fuel, along with other measures.

Other port cities say they plan to promote the use of electric or natural gas-powered trucks and other shore equipment. But these piecemeal plans could mean shippers just divert shipments to unregulated ports, the report said.

By CNBC's John Schoen.