South Korean Shipping Industry Pushes Back Against Major Corporations Eyeing The Sector

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Some major South Korean corporations are seeking to venture into the shipping business, sparking opposition from the shipping sector.

According to industry sources on June. 12., LOTTE Global Logistics is set to launch an eco-friendly marine transport business by introducing two ammonia-powered vessels. Previously, on May 25, 2021, LOTTE Global Logistics formed a consortium and signed a memorandum of understanding (MoU) for the marine transport and bunkering of green ammonia with LOTTE Fine Chemical, POSCO, HD Korea Shipbuilding & Offshore Engineering (HD KSOE), and the Korean Register (KR).

Memorandum of understanding 

Kim Yang-soo (left), CEO of the Korea Ocean Business Corporation, and Kang Byoung-ku, CEO of LOTTE Global Logistics, are taking a commemorative photo after signing a memorandum of understanding last month.

Hanwha Group is also positioning itself to enter the shipping industry. In April of this year, Hanwha Ocean established a shipping company named “Hanwha Shipping LLC” under its U.S. subsidiary. Hanwha Ocean explained, “Hanwha Shipping LLC is intended to demonstrate our eco-friendly and digital technologies for ships,” adding, “We are in the process of concretizing the business.”

Green fuel transportation sector 

However, the shipping industry is taking steps to counter the entry of large corporations into the green fuel transportation sector. According to Article 13 of the Enforcement Decree of the Marine Transportation Act, corporate entities with a 40% or greater share of shippers with bulk freight are prohibited from entering the shipping industry. Nonetheless, eco-friendly fuels such as methanol, ammonia, and hydrogen are not classified as bulk cargo, thus permitting large corporations to enter the green fuel transportation business.

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Source: Chosun