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ENB Pub Note: The shipbuilding and buying of tankers to circumvent the Jones Act are critical to the United States’ Energy Dominance model, which the current administration is following. There is a combination of buying tankers and having them flagged under the US, allowing for wartime exemptions under the Jones Act, without requiring them to be built, but instead to be flagged as a US tanker. The Update from LNGPrime is covering one Shipyard in Tampa working with HD Hyundai.
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Office of Maritime and Industrial Capacity:
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The Executive Order creates this office within the National Security Council, led by the Assistant to the President for National Security Affairs (APNSA), to coordinate a government-wide effort to revitalize U.S. shipbuilding.
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The office is responsible for overseeing the development of the Maritime Action Plan (MAP), which must be submitted within 210 days (by November 2025). The MAP is a comprehensive strategy to rebuild the U.S. maritime industrial base, grow the U.S.-flagged commercial fleet, and enhance national security.
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It coordinates with multiple cabinet agencies, including the Departments of Defense, Commerce, Transportation, Homeland Security, Labor, and the U.S. Trade Representative, to ensure a whole-of-government approach.
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Assistance for Investors to Build Ships in the United States: The Executive Order outlines several measures to incentivize private investment in U.S. shipbuilding, providing opportunities for investors to contribute to the industry’s revitalization. These include:
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Maritime Security Trust Fund: The order establishes a dedicated funding mechanism to provide consistent support for maritime programs. This fund will draw from revenue streams such as tariffs, port fees (e.g., Harbor Maintenance Fees), fines, and other targeted taxes. It aims to finance infrastructure upgrades, workforce development, and a Shipbuilding Financial Incentives Program to encourage private investment in shipbuilding, repair facilities, and component manufacturing.
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Shipbuilding Financial Incentives Program: The Department of Transportation is directed to develop a legislative proposal within 90 days for a program that incentivizes private investment through grants, loans, and loan guarantees compliant with the Federal Credit Reform Act. This program may augment or replace existing programs like the Small Shipyard Grant Program and the Federal Ship Financing (Title XI) Program, offering broad flexibility to support the construction of commercial components, parts, vessels, and capital improvements to shipyards, repair facilities, and drydocks.
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Maritime Prosperity Zones: Modeled after Trump’s Opportunity Zones from his first term, these zones aim to incentivize investment in waterfront communities by offering tax breaks and other financial incentives to attract private capital for shipbuilding and related infrastructure projects.
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Defense Production Act (DPA) Title III Authorities: The Department of Defense is tasked with assessing options to leverage DPA authorities and private capital to expand the maritime industrial base, including investments in shipbuilding, repair facilities, port infrastructure, and supply chains. The DoD’s Office of Strategic Capital loan program is highlighted as a tool to support shipyard projects.
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Deregulatory Initiatives: Within 30 days, the Secretaries of Defense, Transportation, and Homeland Security are required to review regulations affecting the domestic commercial maritime fleet and port access to identify opportunities for deregulation. This aims to reduce costs and barriers for investors and shipbuilders, aligning with Trump’s broader deregulation agenda.
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Market Forecasting and Procurement Reforms: The order mandates reforms to provide American shipbuilders with market forecasting to justify investments in infrastructure, workforce, and intellectual property. It also calls for streamlined acquisition strategies, reduced layers of approval, and the use of commercial acquisition practices to make shipbuilding more attractive to private investors by minimizing delays and cost overruns.
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Additional Support for the Maritime Industry:
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The order emphasizes workforce development, including investments in the U.S. Merchant Marine Academy and mariner training programs, to ensure a skilled labor pool for shipbuilding and maritime operations, indirectly supporting investor confidence in the industry’s sustainability.
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It directs the U.S. Trade Representative to address China’s anticompetitive practices, including potential tariffs on Chinese-built cranes and cargo equipment, which could level the playing field for U.S. shipbuilders and make domestic investment more viable.
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The enforcement of Harbor Maintenance Fees on foreign cargo, including goods routed through Canada or Mexico, is intended to generate additional revenue for maritime investments, further supporting the financial ecosystem for shipbuilding projects.
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The Executive Order responds to the decline of U.S. shipbuilding, which accounts for less than 1% of global commercial ship production compared to China’s approximately 50%.
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By creating the Office of Maritime and Industrial Capacity and providing financial and regulatory incentives, the order aims to attract private investment to rebuild U.S. shipyards, increase the production of commercial and military vessels, and enhance national security.
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Industry leaders, such as HII’s CEO Chris Kastner and the Shipbuilders Council of America, have praised the order as a bold step to expand capacity and meet demand for ships. However, some analysts note that significant congressional funding and sustained political commitment will be necessary to achieve these goals, given the high costs and long timelines involved in shipbuilding.
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The success of these investor incentives depends on congressional support for funding and legislative proposals, as the Executive Order alone cannot appropriate funds.
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Critics, such as the Cato Institute, argue that laws like the Jones Act, which mandates U.S.-built ships for domestic transport, increase costs and may hinder competitiveness, potentially complicating efforts to attract investors.
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The order’s focus on tariffs and fees, such as those on foreign-built roll-on/roll-off (ro-ro) vessels, could raise costs for some industries, potentially affecting the broader economic environment for maritime investments.
Update from LNGPrime.com on Tampa Ship
HD Hyundai said in a statement that it held a signing ceremony on June 19 with Tampa Ship to establish a strategic and comprehensive collaboration that outlines a multi-faceted alliance to build medium-sized LNG dual-fuel containerships at Tampa Ship.
The partners are targeting first deliveries in 2028.
As part of the collaboration, HD Hyundai will provide critical support to Tampa Ship in vessel design, procurement of specialized equipment, and transfer of advanced shipbuilding technology.
HD Hyundai said it will also participate in the fabrication of certain ship blocks and invest in key technical infrastructure to enhance the capability of Tampa Ship.
Tampa Ship, located in Tampa, Florida, has a long legacy in US shipbuilding and is one of five shipyards operated by ECO across the country.
Through this initiative, Tampa Ship is positioned to “lead the revitalization of US commercial shipbuilding and to help address the shortage of domestically constructed vessels.”
According to Clarksons Research, US yards received orders for only three 3,600 teu-class containerships between 2022 and 2024.
This collaboration between HD Hyundai and Tampa Ship aims to “address this gap and re-establish the United States as a competitive force in the global shipbuilding industry.”
Through this collaboration, the parties also expressed intent to explore further opportunities beyond commercial containerships, including collaboration on other potential fleet classes as well as heavy industrial port equipment.
This initiative follows HD Hyundai’s ongoing efforts to deepen cooperation with US maritime and defense stakeholders.
Earlier this year, the group entered into agreements with Huntington Ingalls Industries and Fairbanks Morse Defense, and continues to support academic partnerships, including with the University of Michigan and Seoul National University, to foster future talent in naval architecture and marine engineering.
Source: LNGPrime.com
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The post HD Hyundai teams up with ECO to build LNG-powered containerships in US appeared first on Energy News Beat.
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