Co hoi cho Dung Quat Shipyard day. Khong biet co nam duoc co hoi khong?
As shipbuilding and shipping industries comes under greenhouse gases (GHG) regulation, industry related companies are expected to get into unlimited fuel efficiency competition and to be ranked depending on their technological competitiveness signaling new restructuring in shipbuilding industry.
Survival of a shipbuilder in the future will depend on whether the company has acquired competitiveness through technology development, as the gap between the rich and the poor gets bigger in the shipbuilding industry.
Lee Seok-je, analyst at Seoul-based MiraeAsset Securities said, "EEDI (Energy Efficiency Design Index) is a fuel efficiency indicating system, which will be applied to all newbuildings contracted from 2013, to show each yard's technological abilities as the key index. Eventually, difference in fuel efficiency will determine newbuilding price and market share."
Standards of EEDI will be continuously upward adjusted, and shipping companies must report EEOI (Energy Efficiency Operational Indicator), a fuel efficiency index. Accordingly, emission trading or carbon taxes market will be created among shipping companies, meaning the beginning of unlimited fuel efficiency competition among shipping firms and shipbuilders.
"Hence, shipbuilders without designs, technologies, and building quality to improve fuel efficiency will never be allowed to enter the market. Liquidation of existing shipbuilders will be visualized depending on the level of their green technologies," explained analyst Lee.
He added that the key to survival of shipbuilders in the future is technology, not cost competition. Korean shipbuilders' outstanding technological capabilities will be verified again with their superior fuel efficiency, which will emerge as an expansion of market share in the end. Flow of new regulation will open a new prospect in valuation of Korean shipbuilders' stock prices.
EEDI was introduced to stimulate technology competition among shipbuilders and to improve fuel efficiency. Infinite competition in fuel efficiency among shipping companies is expected to begin.
Regulation currently under discussion is a relative evaluation system; a competitor with lower fuel efficiency has to pay additional fuel cost and alloted expense, and the other side of competitor benefits from it by taking the levy.
This regulation will be applied to existing ships as well as newbuildings, meaning that shipping companies should make newbuilding orders in consideration of fuel efficiency from now on regardless of the forecasted effective date in 2014.
