China's solo run continues in the global eco-friendly ship market. Many still say Korea leads in technology, but China is increasing orders on the back of strong domestic demand, quickly narrowing the technology gap.
According to Clarksons Research on the 4th, Chinese shipbuilders accounted for 51.1% (about 11.5 million CGT) of orders for alternative-fuel ships last year based on CGT (compensated gross tonnage). Korea won 30.9% (about 6.94 million CGT). In 2020, Korea took 68% and China 23.5%, but the positions have reversed.
Looking only at this year, the gap widens further. Through February, Korean shipbuilders' share of alternative-fuel ship orders was 17.3% (about 2.07 million CGT), far behind China's 72.4% (about 8.69 million CGT). By number of vessels during the same period, China's orders (264 ships) were 5.3 times Korea's (50).
Alternative-fuel ships use energy sources with lower carbon emissions instead of petroleum-based fuels such as heavy oil and diesel. LNG-powered ships, methanol-powered ships, ammonia-powered ships, hydrogen-powered ships and electric-powered ships fall into this category.
China first overtook Korea in 2022 by winning 47.9% in the alternative-fuel ship market, while Korea managed 46.7%. China has since widened the gap and is now running away with the market.
Chinese shipbuilders' surge is thanks to strong government support policies. At the end of 2023, five central government ministries jointly released the "Action plan for the green development of the shipbuilding manufacturing industry (2024–2030)," pledging to increase supplies of eco-friendly ship products and raise alternative-fuel and new-energy technologies to international standards.
It also achieved its goal of lifting the international market share of eco-friendly ships such as LNG and methanol to more than 50% by 2025. With state-owned shipping companies and shipyards, China benefits from abundant domestic orders, which helps speed up technology validation.
In the shipbuilding industry, many still say Korea is ahead in technology. The Korea Institute of Science & Technology Evaluation and Planning (KISTEP) assessed that, as of the end of last year, Korea's technology was two years ahead of China.
Korea's strength is seen in the rapid commercialization of technologies for large LNG-powered ships as well as methanol and electric propulsion ships. China is increasing investment in eco-friendly ship technologies, but has relatively little real-vessel operating experience, which is a weakness. Korea is also considered ahead of China in areas such as the number of international certifications and independent design and manufacturing capabilities for high-difficulty equipment.
Meanwhile, the market for alternative-fuel ships is expected to continue growing. Driven by regulations from the International Maritime Organization (IMO), the share of eco-friendly ships in global orders is steadily rising. The share of alternative-fuel ships in total new orders increased from 32% in 2021 to 45% in 2024.
An industry official said, "China can surge ahead ultimately because domestic orders are possible," adding, "The government and others should create conditions so that shipping companies in our country can place orders for eco-friendly ships incorporating new technologies."
Yang Jong-seo, a senior researcher at The Export-Import Bank of Korea's Overseas Economic Research Institute, said, "As China develops technology and narrows the gap, the 10%–30% price difference in ships is not shrinking, so the market-share gap is bound to widen," adding, "It won't be easy, but we also need to consider ways to enhance price competitiveness."