Hyundai Steel was one of the signatories in the agreement for the “2024 Transition Transportation Subsidy Support Project” which is being spearheaded by Korea’s Ministry of Oceans and Fisheries. Signed on March 8, the agreement highlights the company’s active engagement in the Korean government’s eco-friendly logistics policy.
Signing ceremony with Ha Sung-gi, Head of the Plates Material Purchase Group (second from left) and the Head of the Coastal Shipping Division, Ministry of Oceans and Fisheries (third from left)
Four major contracting companies – Hyundai Steel, Hyundai Glovis, HD Hyundai Oilbank, and POSCO – together with eight shipping companies including Intras were selected for the project.
The Transition Transportation Subsidy Support Project aims to promote eco-friendly logistics by subsidizing efforts to reduce social costs such as air pollution, greenhouse gas emissions, and traffic congestion through a conversion from road freight transport to coastal shipping transport, in accordance with the Sustainable Transportation Logistics Development Act. Under the agreement, the Ministry of Oceans and Fisheries plans to open four new shipping routes in addition to the existing 15 coastal shipping routes. The project will allocate subsidies of approximately USD 2 million for 1.15 million tons of cargo to be converted to coastal shipping transport.
In line with the current eco-friendly logistics trend, Hyundai Steel has been operating the Donghae Logistics Base since 2013, utilizing two dedicated vessels to transport high-quality limestone from Donghae Port to Dangjin Port via coastal shipping. Limestone is the largest single-source raw material procured by the company, with approximately 4 million tons purchased annually to remove impurities from the blast furnace process and steelmaking process.
Transporting such a large volume of limestone from Gangwon Province to Dangjin Integrated Steelworks via road transport incurs a number of social and environmental costs, such as traffic congestion, road damage, dust, noise, and carbon dioxide emissions. To address these issues, Hyundai Steel has proactively adopted coastal shipping. Furthermore, to maintain the maritime transport volume of limestone, the company is enhancing eco-friendly facilities within the Donghae Logistics Base and operating sprinkler trucks to mitigate local complaints. Additionally, at Dangjin Port, efforts by the Port Operations Team and the Raw Material Technology Team to improve cargo handling efficiency are underway.
In 2024, Hyundai Steel plans to purchase a total of 3.75 million tons of limestone, of which 67% or 2.5 million tons, will be transported via coastal shipping. As a result, the company is projected to receive over USD 850,000 in government subsidies, an increase of more than USD 150,000 compared to the previous year, making it the largest beneficiary among the participants in the project. Hyundai Steel intends to stay actively engaged in the government’s eco-friendly logistics initiatives, and will prioritize efforts to ensure efficient operations at the Donghae Logistics Base and Dangjin Port.
For its part, the Ministry of Oceans and Fisheries expects that this project will lead to a carbon dioxide emissions reduction of approximately 170,000 tons this year, contributing to reducing greenhouse gas generated by the logistics sector. It is anticipated that reductions in traffic congestion, accidents, noise, and dust emissions will result in a savings of over USD 39 million in social and environmental costs.