Green machines all the rage due to tighter regulations

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Green machines all the rage due to tighter regulations

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Fuel efficiency is becoming a buzzword among manufacturers of heavy construction equipment as tightened environmental regulations will be implemented in Korea from 2015. 

Dubbed “Tier-4 interim,” the emissions-related regulation was already put in force in Europe and the United States this year.

Now three local companies - Doosan Infracore, Hyundai Heavy Industries and Volvo Construction Equipment - are gearing up to jump on the trend and stay competitive by launching more environmentally friendly equipment. 

The country makes 27 different types of construction equipment, including excavators, wheel loaders and concrete pump trucks. The three aforementioned manufacturers are similarly placed in the market but Doosan has a slight market edge. 

“In terms of equipment, there is a direct link between how much it respects the environment and its competitiveness, so local manufacturers are increasingly paying attention to this,” said Yoon Young-seok, an executive director of the Korea Construction Equipment Manufacturing Association. 

“The industry here lags behind advanced countries in terms of such regulations, but it is moving quickly to catch up.” 

Meeting advanced countries’ environmental regulations entails huge research and development costs, but as about 80 percent of local companies’ revenue derives from exports, “it is very important for them to meet higher emissions regulations abroad,” Yoon said. 

As such, they are now trying to improve the fuel efficiency and noise emissions of their products in order to gain competitiveness on foreign shores. 

Doosan Infracore delivered an unequivocally green message at one of the nation’s biggest trade fairs, the Construction Equipment Exhibition 2012, last month. It also recently introduced an ungraded DL-3 wheel loader line that is 30 percent more fuel efficient than previous models and meets Tier-4 interim targets.

“In much the same way as drivers are becoming increasingly conscious about fuel mileage, the construction industry is becoming more aware of fuel efficiency,” said a Doosan employee. 

Hyundai Heavy Industries (HHI), which is leaning more heavily on its construction equipment business to compensate for depressed shipbuilding orders, is also going green. 

HHI is already the world’s largest shipbuilder but it aims to replicate this success in the construction equipment market, an area that has posted double-digit growth in recent years. 

The company is building a hybrid forklift and an electric excavator at the request of the Ministry of Knowledge Economy. This is part of a state-backed project to develop green construction equipment with an aim of slashing carbon emissions. The government plans to invest about 6 billion won ($5.43 million) over the next three years. 

HHI is designing a seven-ton hybrid forklift with a diesel engine and an electric motor that is expected to be almost one-third more fuel efficient than current models. 

It is also building a 21-ton electric excavator, the first in the world. If the project succeeds, HHI is likely to dominate the global electric excavator market, the company said. 

“As the local construction market is mired in a long-term slump, our targets are emerging markets like Brazil, Russia and the Middle East,” said an HHI employee. The company is also scheduled to complete construction of a heavy equipment plant in Rio de Janeiro. Brazil is a rising market for heavy industrial companies as it prepares to host the 2014 FIFA World Cup and 2016 Summer Olympics.  

Volvo Construction Equipment, a foreign player, has also slid into the domestic market and found its place among the top two players. The Swedish company entered Korea by acquiring the construction equipment sector of Samsung Heavy Industries in 1998. Sprinting ahead in the race to go green, Volvo launched new excavators that use its own technology to cut fuel consumption while enhancing the performance of the engines.  

“We can say that Volvo played a role in leading the environmental trend as it introduced eco-friendliness, one of its key values, to the local market,” said Yoon. “By comparison, Korean companies were a bit late going green, but they learned from the Swedish firm and can stand shoulder-to-shoulder with it.” 

By Song Su-hyun [ssh@joongang.co.kr]

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