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46 ships for 400 million dollars! South Korea's “blood money” bet on environmentally friendly ships

Release time:

2024-08-23

With the rapid growth of orders for environmentally friendly ships, in order to ensure the competitiveness of the shipbuilding industry in the future, the Korean government will take the lead in ordering 46 environmentally friendly power ships, and will invest heavily in the field of environmentally friendly ships such as hydrogen, ammonia and other zero-carbon ship technology, as well as the localization of the core technology of LNG ships and electric propulsion ships and the training of human resources, and will fully support the upgrading of the development of South Korea's shipbuilding industry.

46 ships for 400 million dollars! South Korea's “blood money” bet on environmentally friendly ships

400 million dollars! South Korea's two departments were released environmental ship support program

January 30, South Korea's Ministry of Industry, Trade and Resources and South Korea's Ministry of Maritime Affairs and Fisheries were released, including the content of the environmental protection ship technology development support plan, “2023 environmental protection ship development implementation plan” and “2023 environmental protection ship popularization implementation plan”. These two plans are based on Korea's Act on Promotion of Environmentally Friendly Ship Development and Popularization and the first phase of the Basic Plan for Environmentally Friendly Ship Development and Popularization (2021~2030), and are designed to ensure that Korea's shipbuilding industry dominates the future shipbuilding market for environmentally friendly ships and other ships and strengthens the core competitiveness of the shipbuilding industry ecosystem under the background of the International Maritime Organization's (IMO) strengthened international norms for carbon emission reduction.

The Ministry of Industry, Trade and Resources of Korea, the Ministry of Maritime Affairs and Fisheries of Korea, the Ministry of Small and Medium-sized Enterprises of Korea and other Korean government departments will rely on these two programs to jointly promote the development of environmentally friendly ship technology business.

According to statistics, the proportion of global orders for environmentally friendly ships has dramatically increased from 29.9% in 2019, 30.4% in 2020, and 32.2% in 2021 to 62.0% last year.

To cope with this trend, Korea's Ministry of Industry, Trade and Resources (MITR) and Korea's Ministry of Maritime Affairs and Fisheries (MOMA) will invest 145.4 billion won (about $119 million) and 362.3 billion won (about $296 million) in budgets related to environmentally friendly ships this year, respectively. Among them, the budget of Korea's Ministry of Industry, Trade and Resources (MITR) has increased from 95.6 billion won (about $78 million) in 2022 to 145.4 billion won this year, an increase of 52 percent.

73 Subject! Ministry of Industry, Trade and Resources' Implementation Plan for Eco-Friendly Ship Development in 2023

According to the Implementation Plan for Eco-Ship Development 2023, the Ministry of Industry, Trade and Resources (MITR) will be in charge of promoting 73 topics in four areas, namely, eco-ship technology development (72.2 billion won budget), test and evaluation (31.9 billion won budget), empirical support (35 billion won budget), and manpower training (6.3 billion won budget). In particular, the budget related to the localization of core technologies and equipment for carbon-free ships, such as the development of hydrogen and ammonia-fueled marine engines and the development of power units for electric propulsion ships, has been significantly increased.

First of all, in order to develop the world's leading future environmentally friendly ship technology, 32.9 billion won (approx. 26.9 million USD) will be provided for the development of carbon-free ship technology such as hydrogen and ammonia, and 39.3 billion won (approx. 32 million USD) will be provided for the localization of the core technology of LNG ships, electric propulsion ships, and the development of carbon-reducing devices such as wind propulsion auxiliary devices. Among them, ammonia-fueled marine engine development, shipboard carbon dioxide (CO2) capture device development, and LNG gasification gas prediction technology are new topics included for the first time this year.

Secondly, in order to validate the technologies, 11 billion won (about US$9 million) will be invested in the development of test and inspection standards such as the development of certification standards and the development of test and evaluation methods for low-carbon and zero-carbon ships, and 20.9 billion won (about US$17 million) will be invested in the construction of test and evaluation facilities for hydrogen-powered ships, LNG cargo tank insulation systems, and so on. Among them, the LPG Reliability Evaluation Center, the Eco-Ship Repair and Conversion Support Center, and the comprehensive management of greenhouse gases on ships are new topics that were included for the first time this year.

Again, in order to support the demonstration project, financial support of 19.5 billion won (approx. 16 million USD) will be provided for the construction of hydrogen and ammonia-powered demonstration ships, and 15.5 billion won (approx. 12.6 million USD) will be provided for the technology validation and market entry through the demonstration at sea. Among them, Gyeongsangnam-do has been selected as a special technology zone for ammonia hybrid propulsion systems for large ships, and a new topic this year is to conduct empirical testing of ammonia hybrid ships.

Finally, in order to cultivate core professionals for developing future ship technologies, 6.3 billion won (approx. 5 million USD) will be invested in support for the cultivation of master's and doctoral degrees in environmental protection and smart ship specialties, as well as in ship engineering support projects that utilize retired professionals.

In order to solve the problem of labor shortage in the shipbuilding cluster areas of Busan, Ulsan, Gyeongsangnam-do, Jeollanam-do and Jeollabuk-do, and to listen to the on-site opinions, the Ministry of Industry, Trade and Resources (MITR) has set up the “Shipbuilding On-site Relief Service Counter” in these five areas since January 30th, and plans to quickly reflect the suggestions or difficulties raised on-site to the policy through this measure. It is planned that through this measure, suggestions and difficulties raised on the spot will be quickly reflected in the policy.

The Ministry of Marine Affairs and Fisheries has ordered the construction of 46 vessels! Ministry of Maritime Affairs and Fisheries “Implementation Plan for Popularization of Environmentally Friendly Ships by 2023

According to the “2023 Implementation Plan for Popularization of Environmentally Friendly Ships”, the Ministry of Maritime Affairs and Fisheries of Korea will first invest a budget of 311.9 billion won (about 255 million U.S. dollars) in the public sector to build 46 environmentally friendly power vessels, including 30 hybrid propulsion vessels, 7 LNG-powered vessels, etc., and to retrofit environmental protection equipment, such as air pollutant abatement devices, on 20 existing vessels. At the same time, it will design the most suitable standard ship type for environmentally friendly ships according to different ship types and environmental protection technologies, and provide technical support in order to save the construction budget and shorten the construction period.

In addition, the Ministry of Maritime Affairs and Fisheries will continue to provide support for environmentally friendly ships to private organizations. For the 14 environmentally friendly ships built by private organizations, subsidies equivalent to 10% to 30% of the ship's price will be given, and partial subsidies for environmentally friendly equipment and interest costs will be provided for the 302 ships retrofitted with environmentally friendly devices, with a total budget of 34.7 billion won (about 28 million U.S. dollars) to be invested.

The “Implementation Plan for Popularization of Environmentally Friendly Ships by 2023” also proposes that the Korean government will increase the construction of environmentally friendly fuel infrastructure such as LNG refueling and supply and electricity, formulate technical and safety standards that allow for simultaneous LNG refueling and loading/unloading, and promote the demonstration business of popularizing electric-propelled passenger and cargo ships equipped with mobile power supply systems. It is planned to construct demonstration projects for onshore power supply equipment for hybrid ships at the ports of Ulsan, Yeosu, and Gwangyang, and to support the commercialization and international standardization of new technologies in Korea in order to capture the international market for environmentally friendly ships. It is planned to create a system to expand the national certification system for environmentally friendly ships from ships to equipment, and to formulate a strategy to promote the legalization of performance and safety standards of new technologies and international standardization, in order to support the entry of Korean companies into the global market.

In addition, in order to cultivate environmentally friendly ship professionals, the plan also proposes to create experience-type equipment, combine training programs with virtual reality (VR), and continue to promote the development of safety standards aimed at the actual navigation of small hydrogen-powered ships and the development of digital monitoring technology on land.

It is reported that the Korean government, in order to actively respond to the new international maritime environmental regulations and to develop new markets for environmentally friendly ships, has implemented the law on the promotion of the development and popularization of environmentally friendly ships since 2022, and at the same time released the mid- to long-term plan for Korea's green ships, i.e., the “2030 Greenship-K Promotion Strategy”.

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