South Korea is one of the biggest shipbuilders with major companies like Daewoo,Hyundai Heavy and Samsung.However its being beaten down by the low cost Chinese companies which are using cheaper capital and lower labor costs to press their advantage.South Korean Shipbuilders have been trying to diversify into offshore wind energy in order to safeguard their revenues.However they face tough competition in this renewable energy sector as well from incumbent wind turbine compaeis as well as Chinese WTG companies like Sinovel,Goldwind and others.Now the South Korean government is helping them with a 300 billion won research fund.This fund will be used to do R&D into building of “Green Ships” which are becoming the new growth segment.
Note Shipping companies are increasingly coming under attack for high carbon emissions and are trying to reduce their carbon footprint.The world’s top container lines like Maersk are investing heavily into deploying large ships which emit less carbon and burn less fuel.Maersk has ordered 20 of the new ‘Triple-E’ class for the three main purposes behind their creation – Economy of scale, Energy efficient and Environmentally improved .
Note this also helps in lowering fuel costs which are rising rapidly.Besides the shipping companies may also come under the purview of cap and trade and eventually have to pay a carbon tax as well.South Korean Shipbuilders have already won large orders and would want to increase their advantage in this area.This might also help them to topple China as the No. 1 Shipbuilding Nation as well.
South Korea will spend 300 billion won ($266.1 million) over the next 10 years to develop technology for low carbon “green” ships in a bid to reclaim its status as the world’s leading shipbuilding country from China.
The Ministry of Knowledge Economy said in a statement on Thursday that two-thirds of the total investment would come from the government and the remainder from the private sector, betting on prospects that the world’s shipbuilding market would turn to energy-efficient, low-carbon vessels.