BUSAN — Tightening global rules on shipping emissions could become a powerful growth engine that structurally upgrades Busan's maritime industry, according to a new analysis. Rather than treating decarbonization as a rise in regulatory costs, the report argues that reshaping shipbuilding, port and shipping operations and building transition capacity within the region could draw trillions of won in investment and create thousands of jobs.
International shipping decarbonization rules will successively drive demand for eco-friendly vessels in shipbuilding, a shift to higher value-added services at ports, and more sophisticated operating strategies in shipping, according to a report released on the 20th by the Bank of Korea's Busan branch and Nam Hyun-jung, a professor at Korea Maritime and Ocean University. The study is titled "The Impact of Stronger Carbon Regulation on Busan's Economy: Focusing on the Maritime Industry."
Shipbuilding stands to feel the biggest impact. As emissions rules tighten and orders rise for high-efficiency and alternative-fuel vessels, a 52.2% increase in European Union Allowance prices would trigger an estimated 10.7 trillion won in new eco-friendly ship investment nationwide.
If that investment materializes, Busan alone would see 1.59 trillion won in production, 626.8 billion won in value added and 8,991 jobs created. The researchers highlighted that 78.7% of Busan's production effect would come through industrial links with neighboring areas including Ulsan, South Gyeongsang Province and South Jeolla Province, and stressed that a wide-area supply chain for shipbuilding equipment spanning the four regions is essential. Busan should move beyond equipment manufacturing to strengthen high value-added professional services such as research and development, testing and certification, and maritime finance, the report said.
Ports are also facing a chance to create new industries through green infrastructure rather than simply handling cargo volume. Applying the 22.1 billion won in green port service infrastructure investment under way at Busan Port, the analysis found 27.6 billion won in production and 126 jobs created within the region. Every 10 billion won of green port investment generates 12.49 billion won in production, 4.92 billion won in value added and 57.7 jobs, the study found. The report advised that future development of Busan New Port and Jinhae New Port integrate shore power supply, known as alternative maritime power, green fuel bunkering and AI-based smart energy management into a single green port service system.
For shipping companies, which bear the direct regulatory cost burden, the report set out the task of refining operating strategies. Using the Arctic route instead of the Suez Canal on the Busan-Rotterdam run would shorten the voyage and cut fuel consumption and carbon dioxide emissions by 28.6%, saving an estimated $526,000 in fuel costs (about 780 million won) and $116,000 in EU Emissions Trading System carbon costs (about 170 million won). Combining that with slow steaming would widen total savings to 37.7%, or 1.03 billion won in fuel costs and 220 million won in carbon costs.
"Policies responding to decarbonization rules must not stop at compensating for regulatory costs. They should focus on accumulating the maritime industry's transition capacity within the region," an official at the Bank of Korea's Busan branch said. "This is the time for local governments and industry to work together and actively support stronger high value-added services and route optimization."