South Korea’s President, Yoon Suk Yeol, has unveiled plans to invest a substantial $4 billion in financing aimed at bolstering the nation’s container ship fleet. This move is anticipated to inject approximately one million TEU (twenty-foot equivalent units) in capacity into the global fleet, marking a significant development in the maritime industry.
“We will provide 5.5 trillion won ($4 billion) worth of eco-friendly ship financing to national shipping companies to increase the size of their fleets and make them more eco-friendly,” announced President Yoon Suk Yeol. The ambitious initiative is projected to elevate the fleet of national shipping companies to a total of 2 million TEU by 2030, with the goal of enhancing the proportion of eco-friendly vessels to 60 percent within Korean ocean shipping companies.
Should this plan come to fruition, it would effectively double South Korea’s fleet capacity and contribute around 900,000 TEU to the global supply of cellular capacity, constituting a notable three percent increase. However, concerns linger regarding potential oversupply, attributable to a surge in new deliveries anticipated for the current year and the following.
The foremost beneficiary of this financing scheme is expected to be the national champion carrier, HMM (Hyundai Merchant Marine). Notably, the Korean government holds a commanding 58 percent stake in HMM, positioning the company advantageously within this strategic maneuver.
President Yoon Suk Yeol further articulated his vision to elevate Korea’s port-automation technology sector, allocating a substantial $360 million towards this endeavor. Additionally, he earmarked a noteworthy $725 million fund to facilitate the transition towards greener practices, particularly emphasizing the development of green corridors and bunkering infrastructure.
However, it’s worth noting that Japan has previously expressed dissatisfaction, lodging two trade complaints with the World Trade Organization (WTO) over Korean industrial-policy programs.
Source:The maritime executive
