South Korea to Subsidize Construction of Ice-class Vessels and Expand Port in Support of Arctic Shipping
South Korean shipbuilders Hanwha and Samsung Heavy Industries have substantial experience building ice-class vessels for Arctic oil and gas projects.
South Korea announced substantial budget increases to support expansion of the port of Busan, readying it for future Arctic traffic and subsidizing domestic construction of ice-class ships. Capturing the promise of growing Arctic shipping traffic is part of efforts to revitalize the country’s southern industrial region.
South Korea’s new government continues to flesh out its economic development proposal aimed at turning the Asian nation into a hub for Arctic shipping.
President Lee Jae Myung’s government announced plans to allocate 1.66 trillion won (1.15 billion Euro) to expand and upgrade port infrastructure in the country’s southeastern region to accommodate future Arctic shipping traffic. The funds are part of the Ministry of Oceans and Fisheries overall 7.4 trillion won budget, substantially increased by 8.4 percent over last year.
The funding also includes 549 billion won (335 million Euro) to develop new icebreakers before 2030 and pursue Arctic shipping initiatives. The country also recently made strides towards construction of its next-generation icebreaker – the country’s second polar research vessel – with bidding for the contract to begin in May 2026.
Subsidies for Arctic ships
South Korean shipbuilders Hanwha and Samsung Heavy Industries have substantial experience building ice-class vessels for Arctic oil and gas projects. The government now aims to further boost ice capable shipbuilding in the country.
"We will invest 11 billion won (US$8 million) per vessel built with icebreaking capabilities for operation on the Arctic shipping routes," Minister for Oceans and Fisheries Chun Jae-soo said in a press conference last week.
Several high ice-class vessels constructed by Hanwha remain in limbo
The investment is part of a strategy to position the country as a key stop along the expanding polar shipping lanes. The funding will also fund research into climate change's impact on Arctic shipping lanes and increased training for polar marine engineers.
Several high ice-class vessels constructed by Hanwha remain in limbo due to Western sanctions against Russia. Originally the Arc7 gas carriers were intended for service with the Arctic LNG 2 project, but their delivery has been put on hold.
Arctic shipping via Busan
The southern port city of Busan experienced multiple vessel departures and arrivals via the Arctic in recent years.
Attracting additional traffic is part of Lee Jae Myung’s administration to revitalize the southern region. The move also includes the relocation of the Ministry of Oceans and Fisheries itself to Busan before the end of the year.
Busan has seen a number of Arctic voyages during the first part of this year’s Northern Sea Route summer navigation season. The oil tanker Prisma and bulk carrier Egor Letov departed from the port on August 21, data from the Center for High North Logistics shows. Several fishing and reefer container vessels also traveled to the southern port city via the Northern Sea Route.
As one of the world’s largest container ports – Busan handled more than 23 million standard units last year – it is well positioned to capture any future growth in Arctic container shipping. In 2023 several container ships traveled from the Korean hub to Russia’s St Petersburg.
