South Korean Government Pledges Premium Ship Construction Leadership

The South Korean government unveiled its new “K-Ship” program designed to build and maintain the country’s leadership as the shipbuilder of premium ships. Speaking at an event at the Samsung shipyard, President Moon Jae-in pledged to support the shipbuilding industry to ensure that it is the overwhelming leader focused on the construction of new eco-friendly ships and automated technologies.

“The government will further strengthen the power of our shipbuilding industry and make it the world's overwhelming No. 1 that no one can overtake," President Moon pledged, according to the Korean Yonhap news service. The president highlighted the shipping industry’s drive to smart ships and new technologies and fuels ranging from ammonia to hydrogen, pledging to support the industry to ensure that it would be the global leader in these trends.

The Ministry of Trade, Industry and Energy outlined the details of the President’s new plan. They reported that South Korean shipbuilders currently are getting two-thirds of all the orders for new low carbon emission ships. Under the government’s plan, the goal is to grow to 75 percent of the market for eco-friendly ships by 2030. 

"The wave of eco-friendly and smartization is also an irreversible trend in the shipbuilding and shipping industries," Moon said during his speech. He referenced the opportunities for South Korea to contribute to the global push for carbon neutrality while saying that shipbuilding is one of South Korea’s strongest industries.

While South Korea received 42 percent of the total newbuilding orders in the first half of 2021, the Ministry highlighted the country’s leadership for premium ships, including large containerships. They calculated that South Korea’s shipbuilders received 63 percent of the orders for premium ships and 66 percent of the orders for eco-friendly ships. 

The government mapped out a broad range of initiatives designed to advance the shipbuilders' position in the industry. To support the development of LNG, they plan to build two LNG bunkering ships by 2022 and develop bunkering infrastructure at Ulsan by 2024. Previously, they committed more than $200 million between 2022 and 2031 for research into clean fuels. They committed to expanding the country’s research efforts into ammonia and hydrogen technologies. 

The government committed to mapping out new policies by 2023 and implementing laws by 2025 to support the development of autonomous shipping. Specifically, they are targeting a 50 percent share in autonomous vessels by 2030.

Other government programs will include payroll subsidies and support for training programs. Shipyards will be subsidies for each new hire as well as receive government monies to fund training for the new technologies. To make up for potential shortages in the workforce as well as to improve the productivity in shipbuilding the government will also explore automation technologies, including welding robots, for the shipyards.

The new initiative came as the government also highlighted that South Korea’s shipbuilders received the most amount of orders for the fourth month in a row, surpassing the competition in China. Citing data from Clarkson Research Service, it was reported that South Korea won 57 percent of orders in August based on tonnage beating the Chinese yards which received only 27 percent of the orders based on tonnage. The Chinese yards, however, remain in the lead for all of 2021, receiving 45 percent of the orders but the South Korean yards are close with 42 percent of the total for 2021.