Busan Becomes a 'Marine Mobility Regulatory Free Zone'

Additional Designation of Blockchain Regulatory Free Zone Achieves Second Special Zone Status... Strengthening the Status as a Marine Capital

Business Promotion System Diagram Following the Designation of the Marine Mobility Regulatory Free Zone.

[Asia Economy Yeongnam Reporting Headquarters, Reporter Kim Yong-woo] Busan City is celebrating a double blessing with the new designation of the ‘Marine Mobility Regulatory Free Zone’ and the additional designation of the ‘Blockchain Regulatory Free Zone.’

On the 6th, Busan City announced that in the 3rd Regulatory Free Zone designation announced by the Ministry of SMEs and Startups, the ‘Busan Marine Mobility Regulatory Free Zone’ was newly designated, and the additional projects for the ‘Blockchain Regulatory Free Zone’ designated last year were also confirmed.

The ‘Regulatory Free Zone’ system is designed to proactively respond to the 4th Industrial Revolution by easing key regulations to allow regions and companies to test and operate innovative technologies related to new businesses they face, fostering regional innovation growth and strategic industries. Companies selected as zone project operators receive financial and tax support benefits for pursuing regulatory exemptions.

The newly designated Busan Marine Mobility Regulatory Free Zone aims to lead a new market in the shipbuilding sector by commercializing small and medium-sized ship LPG propulsion systems in line with the government’s eco-friendly ship policy.

The zone covers 52.64㎢ including Yeongdo-gu, Gangseo-gu, and the Busan sea area, with participation from six shipbuilding-related companies and six research institutes and universities.

The regulatory exemptions allowed in this zone include three cases: demonstration of hybrid electric propulsion ship construction with LPG engine power generation for medium-sized ships, demonstration of LPG outboard motor conversion for small ships, and demonstration of LPG refueling from land to ship.

Although LPG fuel is commonly used on land, it has not been applied to ships. By applying LPG fuel to ships and verifying safety, this project responds to eco-friendly energy policies in domestic and international ship markets following the enforcement of the Eco-Friendly Ship Act, and it is significant in establishing domestic and international standards for constructing LPG-powered ships, which currently do not exist.

Currently, about 15,000 coastal fishing vessels, accounting for 22% of domestic coastal fishing boats, are small and medium-sized ships under 50 tons that are over 21 years old, representing a priority market for applying LPG fuel ships.

The related market is also showing growth overseas. LPG ships are expected to significantly contribute to reducing environmental pollution at Busan Port by lowering fine dust such as sulfur oxides and nitrogen oxides, which are major concerns for port cities.

Through related business linkage and development, the demonstration period is expected to generate sales increases of 46.3 billion KRW, create 132 jobs, and attract 17 companies. After the demonstration, by 2030, it is anticipated to generate sales increases of 152.7 billion KRW, create 1,080 jobs, and attract 33 companies, producing significant economic ripple effects.

Experts view LPG as the optimal alternative among eco-friendly energies because, although hydrogen is highly likely to become the main eco-friendly ship fuel in the future, the timing is uncertain. LPG offers higher practicality in terms of economy, bunkering, and thermal efficiency and can be commercialized in the short term.

Busan, which holds the highest shipbuilding industry share nationwide and 62% of shipbuilding equipment companies, is evaluated as the optimal location for revitalizing upstream and downstream industries through the designation of the regulatory free zone.

Busan City also gained momentum in project promotion with the inclusion of additional projects for the blockchain regulatory free zone designated last year in this 3rd zone designation.

Since the designation, many achievements have been made, including the enactment of related ordinances, selection for the Ministry of Science and ICT’s human resource development contest and blockchain public-leading pilot project contest, implementation of a mobile citizen card citizen experience service based on decentralized identity authentication, and selection as an excellent institution for regulatory free zone operation performance.

To nurture the regional blockchain industry beyond the designated period of the regulatory free zone and to secure an early lead in the domestic and international blockchain markets, a diffusion strategy through additional projects is being pursued.

Through the expansion of the existing zone, blockchain technology’s applied industries and demonstration services are continuously linked to lead new industries and realize a genuine blockchain city. Busan City expects sales of 1.1058 trillion KRW, job creation of 21,220 people, and the attraction of 490 companies by 2030.

Byun Sung-wan, Acting Mayor of Busan, said, “2020 marks the 20th anniversary of Busan’s declaration as the Northeast Asia Marine Capital, and the designation of the Marine Mobility Regulatory Free Zone will lay the foundation for the development of new marine industries,” adding, “Furthermore, through the additional projects of the Busan Blockchain Regulatory Free Zone, Busan is taking the lead in advancing into the digital economy.”

This content was produced with the assistance of AI translation services.