As China’s shipbuilding industry is booming, Korean exports of environmentally friendly marine engines are also on a growth trend. Korean marine engine manufacturers are expanding their exports to China on the strength of their environmentally friendly engine technology.
According to Clarkson Research on December 14, China’s shipbuilding volume in 2024 will grow by 18.2% year-on-year to 36.34 million dwt, while new ship orders will increase by 51.9% year-on-year to 87.11 million dwt.
Exports of Korea’s technologically superior marine engines to China are growing as global environmental regulations for shipping are tightened. Demand for dual-fuel engines that can be converted to methanol, liquefied natural gas, and diesel has soared as Chinese shipyards have received large-scale orders for retrofitting engines on older ships and building new, environmentally friendly ships since 2023.
Among the 541 new ships globally, 273 environmentally friendly ships using alternative fuels such as liquefied natural gas (LNG) and methanol accounted for 46.2% of the total, surpassing last year’s proportion of environmentally friendly ships (40.6%). Among them, Chinese shipyards won more than 70% of global orders for environmentally friendly ships in the first three quarters of this year.
The demand for eco-friendly ships is growing due to the global shipping industry’s tightening of environmental regulations such as carbon emissions. Since 2018, countries, including the International Maritime Organization (IMO), have announced targets for environmentally friendly transformation of ships. As a result, shipping companies have increased orders for environmentally friendly ships in order to reduce costs.
The Chinese government has also seized the opportunity presented by environmental regulations and introduced various support policies. From 2023 onwards, the Chinese central and local governments have introduced a number of support measures, including tax breaks for shipbuilding and subsidies for environmental technology development.
In fact, South Korean imports of marine engines imported into China amounted to $581 million in 2023, up 95 percent year-on-year. Imports have continued to expand this year, with Chinese shipyards such as Jiangsu New Times Shipbuilding and Nantong Xiangyu Shipbuilding & Offshore Engineering Co., Ltd. (XMXYG SOE) having signed contracts with South Korean manufacturers for marine engines worth hundreds of billions of won.