Greenland Territorial Dispute... Will Domestic Shipbuilding Benefit? [Yang Nakgyu's Defence Club]

Trump Expresses Intent to Incorporate Danish Greenland
Denmark and European Union Voice Concerns... Moves to Strengthen Naval Power

As the Trump administration in the United States expressed its intention to incorporate Greenland, a Danish territory, Denmark and the European Union (EU) have voiced concerns. Denmark is raising its defense budget and strengthening its naval forces to protect Greenland. With countries competing to enhance their naval power, there is interest in whether the domestic defense shipbuilding industry could benefit.

▲ Greenland coveted by Trump = Greenland is an island located in the Arctic Ocean between the United States and Europe. It is the largest island in the world, about 10 times the size of the Korean Peninsula. The island has been under Danish rule for 300 years and has exercised autonomy (as a Danish autonomous territory) since 2009, except in foreign affairs and defense. It has a population of 57,000 and receives $1 billion in annual support from Denmark, which amounts to $17,500 per resident.

President Trump’s interest in Greenland stems from its significant military and economic value. Greenland produces 34 types of natural minerals, 25 of which are used in electric vehicles, smartphones, and wind turbines. Geopolitically, it is a coveted location for the U.S. Due to abnormal climate changes melting glaciers, Greenland is considered the shortest maritime transport route between the U.S. and Europe. Geographically, Greenland is closer to New York than to Copenhagen, the capital of Denmark, making it a "highway" connecting the Arctic and North America. According to the Arctic Council, transportation through the Arctic region increased by 37% from 2013 to 2023. If the U.S. develops the Arctic route, the distance of the Western Europe-East Asia route passing through the Suez Canal could be reduced by about 40%.

▲The OMG project has been launched for Greenland glacier research.
[Photo by NASA]

However, the U.S. is concerned about China and Russia. China has included the Arctic route development in its "Belt and Road" initiative, a land and sea Silk Road project connecting Central Asia and Europe. In November last year, China and Russia agreed to jointly develop the Arctic route. Although the U.S. wants to counter this, it has fewer naval vessels than China. The U.S. Navy has 219 warships (excluding logistics and support vessels), fewer than China's 234 warships.

▲ Greenland as a military strategic point = Greenland is also militarily important. According to a report titled "Trump and Greenland: Intensifying U.S.-China Competition in the Arctic" published by the Korea Institute for Defense Analyses, the U.S. has long recognized Greenland’s importance. During World War II, Germany secretly operated a weather station on Greenland’s eastern coast, which the U.S. strongly opposed. President Truman attempted to purchase the island as a strategic asset, but the plan failed due to Copenhagen’s opposition. Eventually, in 1950, the U.S. signed an agreement with Denmark and built the Thule Air Base near Greenland’s summit. It served as a strategic security hub for about 40 years, but its mission has since changed. It is now called the Pituffik Space Base and plays a key role in early defense against Russian missiles.

Some view Trump’s ambitions as imperialistic territorial desires, raising the possibility of military action. However, experts believe that even though President Trump emphasizes "America First," actual military action is unlikely. Using force to acquire Greenland could legitimize the war logic of Putin (Russia), who illegally invaded territories, and Xi Jinping (China), who targets Taiwan.

▲Research work on the Greenland ice sheet begins until 2020.
[Photo by NASA]

▲ Denmark urgently strengthens naval power = Denmark has become urgent in response to the U.S.’s interest in Greenland. On the 4th, Danish Prime Minister Mette Frederiksen visited Germany and France before rushing to the UK. After a dinner meeting with UK Prime Minister Keir Starmer at 10 Downing Street, she said, "We agreed on the need for close cooperation on the Arctic region and to ensure the security environment of the Arctic, including Greenland."

The UK avoided direct mention of Greenland. In a statement released afterward, the UK Prime Minister’s Office did not explicitly mention Greenland but said, "The Prime Minister paid tribute to Denmark’s important role in Arctic security and welcomed Denmark’s announcement of a new military package to defend the Arctic against hostile acts." However, it emphasized cooperation within frameworks such as NATO and the European Joint Expeditionary Force (JEF), led by the UK and involving Northern European and Baltic countries, to respond to threats in the area.

Denmark, feeling the urgency, immediately increased its defense budget. It decided to invest 14.6 billion kroner (about 2.95 trillion won) to strengthen Arctic security. Plans to build vessels dedicated to Baltic Sea cleanup and patrol were canceled, and instead, the number of Arctic mission frigates will be increased. This means replacing the aging Thetis-class frigates that perform surveillance missions in Greenland and the Arctic Ocean.

▲ Could this be an opportunity for domestic shipbuilding and defense companies? = Some predict that Denmark’s naval enhancement could be an opportunity for South Korean shipbuilding and defense companies. Besides warships, icebreaker construction is also possible. Hanwha Ocean and Samsung Heavy Industries are considered potential beneficiaries if icebreaker orders increase. Hanwha Ocean has built icebreaking liquefied natural gas (LNG) carriers since its predecessor, Daewoo Shipbuilding & Marine Engineering. Samsung Heavy Industries has experience cooperating with Russia’s Zvezda Shipyard on building icebreaking LNG carriers.

There is also analysis that icebreaker orders will increase once the Russia-Ukraine war ends. Before sanctions from Western countries halted icebreaker orders, Russia was the largest customer of domestic shipbuilders. In 2021, Russia ordered four icebreakers each from Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries.