The International Maritime Organization (IMO) is strengthening environmental regulations to reduce carbon emissions in the shipping industry. The Energy Efficiency Design Index (EEDI) was introduced in 2013, requiring new ships to be more energy efficient. Since then, the scope of the regulation has been fully extended to existing ships in operation, followed by the announcement of the IMO 2020 in 2020 aimed at limiting the sulfur content of ship fuel from 3.5% to 0.5%. Recently in 2023, the Existing Ship Energy Efficiency Index (EEXI*) and Carbon Intensity Index (CII**) were introduced for existing ships for a full-scale regulation of the energy efficiency and carbon emissions of ships in operation .

* EEXI (Existing Ship Energy Efficiency Index) indicates the efficiency of existing ships
** CII (Carbon Intensity Indicator) indicates the intensity of a ship's carbon emissions.

Stricter environmental regulations are expected to increase the demand for eco-friendly ships, creating opportunities for Korean shipyards with strengths in producing eco-friendly, high-value-added vessels.
The Korean shipbuilding industry won 58% of high-value-added ship orders* placed in 2022.
More specifically, Korea won 70% of large LNG carrier orders, demonstrating its world-leading LNG carrier technology. Also in the eco-friendly ship market, the Korean shipbuilding industry won more than 50% of the global orders of 26.06 million CGT.
In particular, Korea won 54% of the orders for LNG-powered ships, which are the most well-known type of eco-friendly ships.

* Large LNG carriers: very large crude carriers (VLCCs) that are 12,000 TEU and larger

The Korean shipbuilding industry has consistently won more than 30% of the world's ship orders since 2018, ranking second only to China in terms of received orders. According to Clarkson Research, the country's major shipbuilders - Hyundai Heavy Industries (including Hyundai Mipo and Hyundai Samho), Samsung Heavy Industries, and Daewoo Shipbuilding & Marine Engineering - are in top three places on the order backlog ranking, having secured an average of three to four years' worth of work.

Korean shipbuilders have the largest backlog of orders since 2011, with 38.21 million CGT as of May 6, 2023. A close look at ship types show that LNG carriers, the best-known type of high-value-added vessels, account for 55%, while container ships, LPG carriers, and tankers also remain competitive with sufficient backlog. In addition, 74% of Korea's backlog is composed of ships powered by alternative fuels, indicating that orders are centered on eco-friendly ships.

The Korean shipbuilding industry is seeking opportunities to rebound after a prolonged recession. To assist the effort, the government announced the Strategy for Securing a Super Gap in the Shipbuilding Industry to maintain competitive in the future shipbuilding market. It has also announced a series of detailed implementation plans to add workforce, develop technology, and boost exports.

Korea's shipbuilding and marine engineering industry is mostly concentrated in the nation's southeast and southwest regions and some in the capital area. In particular, the southeast region with Busan, Ulsan, Changwon, and Geoje plays an important role as a shipbuilding cluster with many medium and large shipyards. The area stands out with a relatively high proportion of large shipyards and related companies such as Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Hyundai Mipo Shipbuilding, while the number of small businesses is low compared to other regions.

The southwest region with Mokpo and Yeongam (Jeonnam) is led by Hyundai Samho Heavy Industries, a major shipbuilding, and has numerous small and medium-sized shipbuilders and shipbuilding equipment makers. The Mokpo, Yeongam, and Haenam regions, where medium and large shipbuilders such as Hyundai Samho Heavy Industries and Daehan Shipbuilding are operating, account for 71. 5% of all shipbuilders in Jeonnam.