Conversion of 39 Eco-Friendly Ships This Year... Total Investment of 205 Billion KRW

Construction of LNG Ship Bunkering Dedicated Vessels and Development of Related Technologies
Introduction of Eco-friendly Standards for Ships and Equipment and National Eco-friendly Ship Certification System

[Sejong=Asia Economy Reporter Joo Sang-don] This year, the government plans to invest a budget of 205 billion KRW to support the conversion of a total of 39 vessels, including 23 public ships and 16 private ships, into eco-friendly ships.

The Ministry of Oceans and Fisheries established and announced the "2021 Eco-friendly Ship Supply Implementation Plan" on the 12th in accordance with the "1st Basic Plan for Eco-friendly Ship Development and Supply (2021?2030)" jointly announced with the Ministry of Trade, Industry and Energy in December last year.

To promote the development and supply of eco-friendly ships, the government enacted the "Act on the Development and Promotion of Environmentally Friendly Ships" in December 2018, which has been in effect since January 2020. In July of the same year, the "Eco-friendly Ship New Market Creation Project" was selected as a Korean New Deal project, and in December, the 1st Basic Plan for Eco-friendly Ship Development and Supply (2021?2030) to be implemented over the next 10 years was established. Accordingly, the Ministry of Oceans and Fisheries established and announced this year's implementation plan.

First, the government and local governments plan to activate the supply of eco-friendly ships by investing about 205 billion KRW in a total of 24 projects this year under this supply implementation plan, supporting the conversion of 23 public ships and 16 private ships, totaling 39 vessels, into eco-friendly ships.

In addition, to expand the fuel supply for liquefied natural gas (LNG) ships, bunkering dedicated vessels will be constructed and related technologies developed. Construction has begun on one Korean-style LNG bunkering dedicated vessel equipped with a newly developed cargo tank (capacity 7,500㎥) made of a new material (high manganese steel) independently developed by a domestic company, and after completing the construction of one small LNG bunkering dedicated vessel, demonstration will commence. Furthermore, production of key equipment to establish the world's first bunkering equipment performance evaluation center will also be undertaken.

Moreover, to decarbonize the coastal shipping sector, the design of a mobile replaceable island power supply system for coastal vessels has been completed, and prototype production will begin, along with the development of certification procedures and safety evaluation techniques for the system. To reduce greenhouse gases, technology development for facilities that store and supply LNG-ammonia dual fuel will start, and for hydrogen fuel, the performance of conceptual models for storage and supply facilities will be evaluated and improved.

The promotion of eco-friendly ship supply will be proactively expanded in the public sector, and various support measures will be implemented to alleviate the burden of converting to eco-friendly ships. This year, a total of 23 public ships from the Ministry of Oceans and Fisheries and local governments are scheduled to be newly built as eco-friendly ships. To resolve difficulties arising from the conversion, support will be provided for eco-friendly standard hull designs by ship type and tonnage, as well as for the evaluation of the condition of aging vessels. A customized standard design system will be developed for applying standard designs and integrated ordering for vessels performing similar tasks. To extend this to the private sector, subsidies (for 16 vessels) or interest subsidies (for 86 vessels) will be provided for a total of 102 private vessels according to ship type and operating area. Subsidies of up to 20% of the ship price will be provided to foreign cargo transport operators replacing aging (20 years or older) Korean-flagged vessels with eco-friendly high-efficiency ships, and to domestic cargo and passenger transport operators who build or replace eco-friendly ships certified by the state. When loans are taken out to install eco-friendly equipment such as ballast water treatment systems, desulfurization devices, and shore power supply facilities (AMP) on foreign cargo ships, part of the loan interest costs will be compensated.

Along with this, to lead the global eco-friendly ship market, the quality of domestic new technologies will be enhanced and industrialization supported, and a foundation for international market entry will be established. Eco-friendly standards for ships and equipment will be prepared, and a "National Eco-friendly Ship Certification System" will be introduced. A national eco-friendly technology list will be developed, promising technologies selected, and standards for testing, inspection, and safety in Korea will be established. Additionally, projects to respond to and cooperate with international organizations such as the International Maritime Organization (IMO) will be promoted to protect and foster related industries. To achieve the 2030 national greenhouse gas reduction target, a statistical base for ship emission air pollutants will be built, and development of domestic technology for simulators used in training for eco-friendly ship operation, which currently relies heavily on imports, will also begin.

Kim Hyun-tae, Director of the Maritime Safety Bureau at the Ministry of Oceans and Fisheries, said, "While the eco-friendly ship basic plan announced last year contains the direction and mid-to-long-term goals for the next 10 years, this year's implementation plan can be seen as the very first stepping stone to ensure that the basic plan leads to the actual expansion of eco-friendly ship supply." He added, "We will thoroughly implement this plan so that Korean-style eco-friendly ships can secure a leading position in the global market."