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[Philippe van Hoof's Market Now] Korea's shipbuilding, shipping, and finance to lead the nation as decarbonisation powerhouse

24 April 2025

Reading time: 4 min

In a byline for JoongAng Ilbo, Philippe van Hoof, country manager for ING Korea, calls for stronger public-private collaboration to drive shipping’s green transition. He highlights new IMO and EU emissions targets, the need for USD28 billion annually for cleaner vessels, and the role of finance—through tools like sustainability-linked loans—in accelerating decarbonisation.

The global shipping industry stands at a critical crossroads of energy transition. The International Maritime Organization (IMO) revised its greenhouse gas reduction strategy in 2023, officially setting a target of achieving ‘Net-Zero’ emissions from international shipping by 2050. The interim targets include a minimum 20% reduction by 2030 and a minimum 70% reduction by 2040, compared to 2008 levels. The European Union (EU) is also intensifying its regulations. Starting this year, the FuelEU Maritime regulation has been implemented for vessels operating in EU waters, and from 1 January 2024, the EU Emissions Trading System (EU ETS) has been applied to shipping, directly imposing costs on vessel carbon emissions. 

These changes demand structural transformation across the entire shipping value chain. Without technological innovation, fuel transition, operational efficiency, and the financial systems to support them, this transition cannot be achieved. While shipping transports approximately 80% of global cargo and remains the most carbon-efficient mode of transport per tonne-mile, it still emits over 1 billion tonnes of carbon dioxide annually. This represents approximately 3% of global carbon emissions, and if current emission trends continue, it could account for 17% of total emissions by 2050. 

Decarbonising shipping requires massive funding. It is estimated that up to USD28 billion annually will be needed for the development and adoption of eco-friendly vessels, with up to USD90 billion required for low-carbon fuel infrastructure. Geopolitical risks also pose variables. Since late 2023, heightened tensions in the Red Sea have forced many vessels to reroute around Africa, resulting in longer voyages and increased fuel consumption, which counteracts carbon reduction strategies. 

Finance plays a role beyond mere funding – it serves as a catalyst for accelerating the transition. Major global financial institutions support shipping decarbonisation through the ‘Poseidon Principles,’ a sector-specific voluntary framework. This represents the first international framework to integrate vessel carbon performance into financial decision-making. Various green financial products, including Sustainability-Linked Loans (SLLs), have been developed to support shipping companies’ transition investments. The large-scale capital investments and technological innovations that will continue for decades ahead require more creative and flexible financial solutions. 

South Korea possesses globally competitive shipbuilding and shipping capabilities. Through collaboration between shipbuilders, shipping companies, financial institutions, and policymakers, Korea is positioned to lead the global shipping industry's green transition. The government must strengthen policy instruments such as carbon pricing, investment guarantees, and financial support, while financial institutions must design structures to mitigate shipping companies’ investment risks. With stakeholder collaboration systems in place, Korea can secure both sustainability and competitiveness, positioning itself as a key nation leading the green transition of the global shipping industry. 

Originally published in JoongAng Ilbo:   Opens in a new tabhttps://n.news.naver.com/mnews/article/025/0003436247?sid=110