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S. Korea: Shipbuilders Look Toward a Future of Greener Vessels and Robot Ships

Korean shipbuilders are upping their investment into green maritime technology and digitalization in a bid to gain an upper hand in competition with rivals in China and Japan. With harsher environmental regulations set to be in place from 2023, the major shipbuilders — Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries — are betting that demand for ammonia-powered vessels will soar.

Although it is still in its development stage, ammonia is receiving attention as a green fuel to replace fuel oil in the future because it does not emit any carbon dioxide during combustion. In comparison, one gallon of diesel emits 10,180 grams (22.44 pounds) of carbon dioxide when combusted, and shipping currently accounts for 3 percent of all carbon dioxide emissions worldwide.

Companies are eager to invest in green technologies such as those related to ammonia fuels. Hyundai Heavy Industries (HHI) announced in May this year that it would spend 7 trillion won ($5.67 billion) on research and development for green technology, including ammonia fuel technologies. HHI plans to hire more than 5,000 new employees for their R&D sector to this end.

The green transformation we seek is a key goal for our company’s future,” said a spokesperson for HHI. “We plan to focus all our capabilities on nurturing key talent and developing the relevant technologies.”

Korean shipbuilders have increased their R&D expenditure by significant amounts. Korea Shipbuilding & Offshore Engineering (KSOE), a subsidiary of HHI, invested a total of 92.5 billion ($71.2 million) won last year in R&D. This is an 8.6 percent increase from the previous year. Daewoo Shipbuilding & Marine Engineering (DSME) invested 72.3 billion won, up 1.6 percent, and Samsung Heavy Industries spent 51.6 billion, up 0.1 percent.

Korea is leading the race for ammonia fuel in shipping in terms of obtaining approvals for development of ammonia fuel and ammonia-fueled ships. Hyundai Heavy Industries acquired the industry’s first approval in principle (AIP) for an ammonia fuel supply system from the Korea Register of Shipping in September 2021. Samsung Heavy Industries also received an AIP for an ammonia-ready very-large crude carrier (VLCC) from DNV, a Norwegian ship classification agency, in August last year.

Japan and China are close behind, with Chinese companies obtaining AIPs later than Korean companies and Japanese companies not having obtained AIPs for green technology, although announcing plans to develop ammonia-powered ships by 2028.

A 174,000 cubic meter LNG carrier built by Hyundai Heavy Industries [HYUNDAI HEAVY INDUSTRIES]

“Investment in green technology such as ammonia fuel is crucial for the survival of shipbuilders,” said Yang Jong-seo, senior researcher at the Global Economic Research Center of Korea Exim Bank. “This is a matter of life or death. If shipbuilders do not provide technologies for reducing carbon emissions, they will be left behind indefinitely.”

Efforts for development of green technologies and fuel are already under way. KSOE is concentrating on the development of eco-friendly ships, such as ammonia ships and liquid hydrogen carriers. DSME obtained approval for 23,000TEU class ammonia-powered super-large container ships from Lloyd’s Register in Britain in October 2020.

It will be a few years before these new ammonia-powered ships are commercialized, but the date is not too far away. HHI plans to commercialize their ammonia ships by 2030, while DSME is developing ammonia propulsion ships with the plan to commercialize them by 2025.

There are some setbacks to using ammonia, such as the fact that the process of producing ammonia emits carbon dioxide. Scientists are now developing ways to produce ammonia without carbon dioxide emissions. Another issue is its relatively low volumetric energy density. “Ammonia requires a storage tank with a volume approximately 4 times larger than that of conventional diesel fuel,” said Park Chul-woong, a researcher for the Korea Institute of Machinery and Materials, in a report. “Therefore, care must be taken not to discharge from the engine or storage tank.”
Ammonia fuel is not the only technology Korean shipbuilders are concentrating on in their efforts to make their ships more eco-friendly. DSME is also developing technology for capturing and storing carbon dioxide. DSME succeeded in verifying technology for capturing and storing carbon dioxide for ships using ammonia in September last year.

Samsung Heavy Industries (SHI) is also speeding up the development of green technology. SHI developed an eco-friendly smart output limiting system earlier this year, and started commercializing it immediately. This system monitors and measures engine output from the main engine or engine shafts of ships, which reduces carbon emissions by tracking the amount of emissions more closely.

“The possibility of replacing existing ships is increasing as the ship operating environment needs to be made more eco-friendly due to the strengthening of marine environmental regulations,” said Kim Young-hun, professor of naval architecture, ocean and IT engineering at Kyungnam University. “The demand for eco-friendly ships is trending and will continue to increase.”

“Korea is leading ahead of Japan and China in terms of moving the shipbuilding industry rapidly towards eco-friendliness,” said Jon Joon-soo, professor emeritus of business administration at Sogang University. “Korea will be able to lead for a considerable period of time if we successfully manage to apply these new businesses.”

Another area crucial in the future of shipbuilding is the digitalization and automatization of ships and shipyards. Digitalization and automatization is an issue that will transform the shipping market along with reduced carbon emissions and high-efficiency enhancements enforced through the strengthening of environmental regulations by the International Maritime Organization (IMO). Digitalization and the use of big data in operating ships can reduce carbon emissions by analyzing and fine tuning the workings of various ship systems so as to make them more efficient.

While automation such as autonomous driving is already underway in the aircraft and automobile industries, automation in the shipbuilding industry is slowly catching on. Starting with the installation of monitoring systems that can remotely monitor ships, the ultimate goal of digitalization and automatization is to develop an unmanned autonomous ship.

“If you look at the future of the shipbuilding industry, digitalization and automation are also connected with the development of robots and artificial intelligence, as they will play a central role in autonomous ships,” said Kim Hyun-soo, a professor of naval architecture and marine engineering at Inha Technical College.

Companies are rushing to develop more digitalized and automated ships and shipyards that can produce such ships. HHI plans to invest more than 320 billion won ($248.7 million) in digital shipyard construction and related production facilities by 2030. HHI is also striving to accelerate digital transformation by building a future-type shipyard. This future-type shipyard is a virtual shipyard that can provide visual information, such as construction status and greenhouse gas emissions by clicking on a ship on a digital map and monitoring power equipment including cranes and forklifts.

“Transformation into a digitalized shipyard through big data collection and automation development is creating a big picture for hedging risks,” said Um Kyung-a, an analyst of Shinyoung Securities. “Shipbuilding is an industry that requires a lot of manpower. If the labor force can be replaced through automation, it will reduce the risk of cost increases due to accidents, process setbacks due to labor-management disputes and the increase in labor costs.”

Kim explains that the shipbuilding industry needs to adapt to rapidly changing environments through the development of green technology and digitalization.

“It is necessary for Korean companies to create new businesses through the digitalization of ships, in connection with integrated control systems and automation,” said Kim. “There are many challenges in the industry such as facing eco-friendliness, decarbonization, and achieving carbon neutrality of shipyards, so it is necessary to secure investment capacities to this end.”
Source: Korea Joongang Daily

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