Envisioning the future with Hanwha Ocean CTO Young-chang Shon

The IMO and the EU have been introducing new environmental regulations. A key forum for these discussions is the IMO's Marine Environment Protection Committee (MEPC), which will hold its 83rd meeting in April this year. Through these meetings, the IMO continues to announce increasingly stringent regulations contributing to market uncertainty. For shipowners, the challenge remains that viable solutions are still quite limited. In the short term, we are prioritizing improvements in ship energy efficiency. In the mid- to long-term, we are developing solutions to enable fuel conversion for future vessels.

Traditionally, shipowners have based their orders on a vessel's capital expenditure (CAPEX) — the initial cost of the ship — along with operational costs projected over a span of more than 20 years. A key shift in today's market is factoring in additional environmental costs. International regulatory bodies are steadily tightening environmental regulations, making it clear that these costs will continue to increase. Taking environmental costs into account, we are conducting extensive research and evaluations to calculate the total cost of ownership over 20, 25, or even 30 years. From Hanwha Ocean's perspective as a shipbuilder, we are developing solutions that deliver environmental value, ultimately providing cost benefits to shipowners.

Hanwha Group's mission is to take the global lead across the entire value chain of liquefied natural gas (LNG) and clean energy solutions. Hanwha Group has reached a mature stage in its technology, particularly in solar, wind, and hydrogen-based power generation. While LNG will remain a dominant fuel in the short term, we firmly believe that we will play a pivotal role in the global energy market transition to cleaner energy. Green shipbuilding technologies serve as a crucial bridge in the energy value chain. With Hanwha Ocean now being part of Hanwha Group, Hanwha is building a comprehensive value chain to enable an eco-friendly fuel transition. Hanwha Ocean is not only enhancing Hanwha Group's value chain but also maximizing the potential of the ocean, expanding into areas such as offshore plants and offshore wind power generation. Through this strategy, Hanwha Ocean plays a crucial role in enabling Hanwha Group to provide integrated future energy solutions on a global scale, securing a strong position in the evolving energy market.

Conventional propulsion systems generate significant carbon emissions, making it essential to improve the overall efficiency of vessels and reduce fuel consumption. That's why we are developing and providing customers with technologies that improve efficiency. However, achieving carbon neutrality requires transitioning to alternative fuels and adapting propulsion systems to support them. Our next-generation ammonia-fueled propulsion system will include a core combustor, crucial for clean energy use, which is being developed by PSM, a Hanwha company and a subsidiary of Hanwha Power Systems. We have introduced our vision for this zero-emission ammonia gas turbine. We're currently working with this roadmap to ensure it can be used across all ship types in the long term.

Some may ask, 'Why ammonia?' Fundamentally, this is about utilizing hydrogen as a fuel. Hydrogen is already recognized as a clean fuel but must be cooled to -250°C to be liquefied. Once liquefied, it requires an insulated tank to maintain its liquid state. This means it must be vacuum insulated, but with current technology, it's very challenging, considering weight, cost, and carrying capacity. This is why ammonia, produced by synthesizing hydrogen with nitrogen, is used as the fuel for these gas turbines. To address this, Hanwha Ocean collaborated with the American Bureau of Shipping (ABS), a global classification society that ensures marine vessels and offshore structures meet safety and quality standards, to assess the potential risks associated with ammonia fuel. Based on the research findings, we successfully obtained a certification from the ABS. However, this is just the beginning. As the development of ammonia-fueled gas turbines progresses, Hanwha Ocean will continue advancing research and development to further enhance the overall safety and integration of ammonia as a marine fuel.

We strongly believe large-sized vessels built by Hanwha Ocean, such as LNG carriers, container ships, and very large crude carriers (VLCCs), will eventually transition to electric propulsion. Compared to mechanical systems, electric propulsion offers a wider range of solutions for handling malfunctions. This is why I strongly believe the transition to electric propulsion, coupled with smart management systems, will accelerate in the future. Hanwha Aerospace is expanding its efforts in electric propulsion for small to medium-sized vessels, and we are working on a propulsion system that utilizes ammonia as fuel for our gas turbines. We plan to create synergies among Hanwha companies to further expand electric propulsion vessels.

In the shipbuilding industry, the service sector, commonly referred to as the aftermarket, typically offers a warranty period of one or two years. Some ships have been in operation for over 30 years. This means that once the free warranty period expires, someone must provide maintenance and operational services for these ships. Hanwha Power Systems and Hanwha Systems provide integrated solutions that include software and digital technologies for ships, enabling us to offer seamless service throughout a ship's lifecycle. The aftermarket for ships is crucial for creating long-term value in the maritime industry. We need to provide sustainable value to our customers, while ensuring we're able to experience mutual growth, which is only possible in the shipbuilding and maritime sector if the aftermarket is strengthened. There are two major types of regulations in the maritime industry. One prevents certain ships from operating, while the other imposes financial penalties for carbon emissions during operation. These regulations coexist and are expected to become stricter moving forward. As a result, older ships must take measures to continue operating. We refer to this process as retrofitting. Retrofitting enables existing ships to comply with environmental regulations and, in some cases, transition to new propulsion systems. We can predict that a ship around 10 years old will face challenges if it is to operate for another decade. One of our key areas of focus is retrofitting ships with ammonia gas turbines and ammonia fuel systems.

The use of ammonia in gas turbine propulsion systems represents a paradigm shift and a fundamental change. First, securing technological maturity is a basic requirement for Hanwha Ocean. Second, we must develop the necessary infrastructure, which requires collaboration with shipbuilders. Unlike power plants on land, where fuel tanks can be installed to provide a continuous and stable fuel supply, ships operate under different constraints. Ships don't remain stationary, right? Like cars, ships need fueling stations. In the shipbuilding industry, this refueling process is called bunkering, and global bunkering infrastructure must be established to supply this fuel. There also needs to be a supply of fuel that fundamentally makes this bunkering possible, which needs to be in line with demand; otherwise, it won't work. Above all, to move forward with confidence, international organizations must collaborate and provide support. I am confident that Hanwha Group can be the driving force in this energy transition and overcome its complexities. The energy transition will be difficult if we do not consider the entire value chain. Without a successful transition, the current direction of the shipbuilding and maritime sectors will be disrupted, and ultimately, we will be unable to prevent the grave consequences of climate change. The drive for decarbonization in the shipbuilding industry must extend beyond our sector and influence broader industrial changes, which is why we are approaching these challenges with a sense of commitment.