Electric ships are becoming a promising way in shipping decarbonization. Nevertheless, the promotion of electric ships encounters obstacles related to indirect emissions, energy and costs. This paper proposes the Shipping Emission-Energy-Economic Impact Assessment Model (SE3IAM) to assess the decarbonization potential of electric ships. China is selected for the case study. This paper also analyzes the impact of climate policies and other factors on CO2 emissions. Results indicate that as the market share of electric ships gradually reaches 1%, 20%, and 35% by 2050, accompanied by advancements in other technological aspects, the total emissions to 2050 are estimated to be around 2, 1.5, and 1 billion tons, respectively. There is a positive correlation between energy demand and decarbonization costs with the level of economic development. Technological progress can alleviate pressures on energy and costs. It is recommended to advance decarbonization at a fundamental level by enhancing energy efficiency and fostering electrification.