Decarbonizing Korean Shipping (4/13): Why Talk About Shipping Now?
The previous installments covered shipping terminology and the history of Korean shipping. This one asks why shipping is such a vast fossil-fuel industry, and where Korea stands amid the fuel transition that global carriers have already begun.
Shipping Is a Fossil-Fuel Industry
The largest cargo aircraft in history, the Antonov AN-225 Mriya, could carry just 16 twenty-foot containers. A mainstay 15,000 TEU container ship, by contrast, hauls the equivalent of 938 Mriyas in a single voyage. Moving a vessel this massive takes staggering volumes of fuel.
According to IMO data, the world's ships burned 211 million tonnes of fuel in 2023. Of that, 93.52% was heavy fuel oil, light oil, or diesel, and for vessels calling at Korean ports the figure was 99.87% bunker C or diesel. Shipping, in short, is a vast fossil-fuel industry.
But the Fuel Is Changing
The decarbonization wave spares no one, ships included. Alternative fuels already account for 6.48% of total fuel use. LNG dominates by far, though its share has slipped from 99.17% in 2019 to 94.50% in 2023. Biofuel is filling the gap, rising nearly sixfold from 67,000 tonnes in 2021 to 390,000 tonnes in 2023, and reportedly to 1.23 million tonnes in 2024.
Measured by ships, the trend is clearer still. Per DNV, 8.9% of the operating fleet (by gross tonnage) was capable of running on LNG, methanol, or ammonia as of last August. The newbuilding market leans even further: more than half of all new orders worldwide (51.1%) are alternative-fuel-capable. Investment premised on the next era has already begun.
Where Korea Stands: Fifth Today, Ninth Tomorrow
According to the Korea Ocean Business Corporation's Maritime Supply Chain Diagnostic Report, 9.8% of Korea's fleet runs on green fuel, fifth in the world. Yet almost all of it is LNG carriers (95.76% by count, 99.51% by tonnage), leaving little fuel diversity.
The real test is the newbuilding order book that decides the future. France (97.6%), Singapore (56.96%), Japan (50.2%), and Taiwan (49.6%) have filled more than half their backlogs with next-generation vessels. Korea, by contrast, has just 2.89 million of 11.87 million DWT (24.4%), barely tenth place. China holds a similar share but seven times the absolute tonnage. On this trajectory, Korea's green-fleet ranking slips from fifth to ninth.
Policy Success, Market Failure
Under the Eco-Friendly Ship Act, the government subsidizes up to 10% of a newbuilding's construction cost, scaled to its carbon savings. The programme has hit 100% budget execution every year since 2022 and exceeded its vessel targets, with the 2026 budget up 69.2% to 39 billion won.
Here the contradiction begins. The budget is fully spent and targets are beaten, yet Korea's green order backlog keeps withering in the global market. This paradox, where "policy success" and "market failure" coexist, is taken apart in Part 3.
The fourth article in the 13-part series "Decarbonizing Korean Shipping," co-produced by ClimateInFact (CLIF) and PLANiT.