S. Korea PM Pledges $4B to Grow Country's Containership Fleet

South Korea's President Yoon Suk Yeol has announced a significant investment of $4 billion to enhance the country's container ship fleet. This financing aims to increase the fleet's capacity by approximately one million TEU, focusing on eco-friendly technologies.

"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," President Yoon stated. "Through this, we will expand the fleet of national shipping companies to a total of 2 million TEU by 2030, and increase the proportion of eco-friendly vessels among national ocean shipping companies to 60 percent."

This expansion is set to double the current size of South Korea’s fleet and will add about 900,000 TEU to the global container capacity, marking a three percent increase. However, the global fleet is expected to remain in surplus due to numerous new ship deliveries scheduled for this year and next.

HMM, the national carrier in which the Korean government holds a 58 percent majority stake, will primarily benefit from this new financing.

Additionally, President Yoon has committed to advancing South Korea's port automation technology with approximately $360 million in financing and enhancing Korean competitiveness in the eco-friendly sector with a $725 million investment in green corridors and bunkering infrastructure.

These initiatives have drawn scrutiny from international trade partners, such as Japan, which has previously lodged two complaints with the World Trade Organization (WTO) against similar Korean industrial policies.

While the Korean government has traditionally refuted claims of subsidizing its shipbuilding industry, Japan has contested the state financial support that Korea extends to its domestic shipyards and vessel operators. Despite WTO rules placing restrictions on state-backed financial aids, enforcement proves challenging.