Shipbuilding Industry "Urgent Need for Government Support on Labor Shortage and Carbon Neutrality"

The 6th Future Industry Forum Hosted by the Korea Chamber of Commerce and Industry
Assessing the Current Status of Preparing for the Future of the Shipbuilding Industry

[Asia Economy Reporter Hwang Yoon-joo] Although the shipbuilding industry has entered a boom period with a surge in orders, it is facing the dual challenges of severe labor shortages and the implementation of carbon neutrality, prompting calls for government support.

The Korea Chamber of Commerce and Industry held the '6th Future Industry Forum' on the 7th to review the current status and future preparedness of the domestic shipbuilding industry, which is entering its second leap forward.

Due to the nature of the shipbuilding industry, digital transformation and carbon neutrality initiatives have been challenging, and prolonged downturns have left little room for preparation. As such, responding to the international community's greenhouse gas reduction demands, such as those from the International Maritime Organization (IMO), and transitioning to high value-added vessels like autonomous ships has not been easy.

Addressing the anticipated shortage of labor and working hours due to the recent surge in orders was also highlighted as an urgent task. The industry has requested expanded incentives to attract manpower to shipbuilding and more flexible use of working hours.

Digital Transformation Period (3.4 years) vs. Low Maturity (4.5 points)... Urgent Need to Enhance Data Utilization

Kim Hyun-jung, Vice President of Deloitte Consulting, who gave the first presentation, discussed the digital transformation strategy of the domestic shipbuilding industry. Shipbuilding takes a long time from order to delivery and has a complex value chain. This has made the industry conservative in accepting external changes, resulting in somewhat delayed digital transformation efforts. In fact, although the shipbuilding industry started digital transformation relatively earlier than other sectors, its outcomes have been relatively insufficient.

According to Deloitte Consulting's survey, the average period during which the shipbuilding industry has actively pursued digital transformation is 3.4 years, longer than the industry average of 3.1 years. However, its digital maturity score was 4.5 out of 10, below the industry average of 5.1.

Enhancing 'data utilization' was identified as a priority task to raise the digital maturity of the shipbuilding industry. Vice President Kim pointed out, "Going forward, we need to build a platform to establish a data-centric culture throughout the entire process from order, design, construction, sea trials, to after-sales management."

She also called for digital transformation in response to the increasing demand for next-generation vessels. Vice President Kim said, "The future shipbuilding industry is rapidly being reorganized into high value-added vessels such as eco-friendly and autonomous ships. We must actively utilize digital twin technology and other tools to accurately implement increasingly complex technologies and improve manufacturing efficiency."

Carbon Neutrality: Industry Characteristics Limit Carbon Reduction... Social Reduction via Eco-Friendly Ships is Important

The second presentation was delivered by Jung Eun-mi, Director of the Korea Institute for Industrial Economics and Trade, focusing on the current status of greenhouse gas emissions in the shipbuilding industry and carbon neutrality. The shipbuilding industry's greenhouse gas emissions are proportional to the volume of ship construction. If reduction targets are set based on periods of significantly reduced construction volume due to prolonged downturns, the burden on the shipbuilding industry increases.

In fact, last September, the National Assembly passed the 'Framework Act on Carbon Neutrality,' which requires reducing emissions by more than 35% compared to 2018 as part of the Nationally Determined Contributions (NDC). The government will set and manage reduction targets by industry accordingly. The shipbuilding industry's 2018 construction volume of 7.72 million CGT was the lowest ever, while future construction volume is expected to increase significantly, so targets should be set considering this.

The characteristics of the shipbuilding industry also need to be considered. The industry's carbon emissions account for only 0.5% of total industrial emissions, and most emission sources are electricity used during shipbuilding, fuel oil used in sea trials, and paint used during coating, leaving limited room for reduction. Therefore, Director Jung emphasized the importance of steadily improving energy efficiency throughout the process and expanding the use of eco-friendly raw materials.

Urgent Need for Proactive Industrial Structure Transformation and Future Technology Acquisition Support

Jang Seok-in, Chair Professor at the Korea Institute of Industrial Technology, who gave the final presentation, called for proactive support for structural transformation and the establishment of global technical standards to secure the future competitiveness of the shipbuilding industry.

Professor Jang said, "The shipbuilding industry will inevitably be reorganized into eco-friendly and high value-added vessels in the future," adding, "To seize this opportunity and maintain Korea's global leadership in shipbuilding, proactive industrial structure transformation and acquisition of future technologies are essential."

In particular, Professor Jang emphasized that since standards set by the IMO are crucial for hydrogen fuel cell-powered ships currently being developed worldwide, the government should actively participate in global standard discussions for hydrogen fuel-powered ships.

During the subsequent open discussion, the shipbuilding industry proposed flexible working hours, the establishment of data platforms, and rationalization of greenhouse gas regulations.

Lee Byung-chul, Executive Vice President of the Korea Offshore & Shipbuilding Association, said, "To effectively respond to the future, the shipbuilding industry needs to strengthen public-private cooperation in developing smart ship data platforms and operate greenhouse gas emission regulations rationally," adding, "Improvements such as the special extended working hours permit system are also necessary to smoothly respond during the shipbuilding industry's recovery period."

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