Canada is also considering using Arctic ports to establish new trade routes with Europe, Energy Minister Tim Hodgson told Bloomberg last week.

The US and China have been investing heavily in the region, which countries are increasingly seeing as a tempting alternative to longer or more dangerous trade routes.

The pilot programme announced by South Korea will see ships leave from the ports of Busan and Ulsan and go through the Northern Sea Route starting in 2026. The long-term plan also includes creating a Northern Sea Route Economic Zone, which would extend through key strategic ports that are already seeing some ships transit through on their way to the Arctic. 

The country is ideally placed to enter the Arctic shipping route, as virtually all ships traveling from Asia (and especially China) to the Arctic will pass near the Korean peninsula. South Korea also has a leading shipping industry which produces many of the world’s Arc7 ships, a type of tanker that can transport oil and gas through the Arctic’s difficult and icy waters.  

Canada, on its part, is looking to develop the port of Churchill, Manitoba, to become a global export hub for ships traveling through the Arctic to reach Europe and other markets. The infrastructure project proposed would be a massive investment in the roads, rails, and port facilities, which Hodgson said would “fundamentally change the economics of all the critical minerals throughout” the Canadian export routes. Churchill is a deepwater port on Canada’s north-eastern coast, with direct access to Hudson Bay and the Arctic via Greenland. 

Source: Google Earth and Trade Finance Global (TFG)

The US, Russia, and China have long been involved in the Arctic, with all three recently announcing large investments in ice-breakers, mostly to transport oil and natural gas to Europe. China has long had plans to develop a “Polar Silk Road” linking it to the Arctic sea, and it has recently been collaborating with Russia to increase its naval and military presence in the region. 

The Arctic region is designated as a marine protected area by the UN due to its fragile ecosystem and role as a global climate regulator, both of which are being put in jeopardy by global warming. Ever since the Cold War, so-called Arctic Exceptionalism had meant the Arctic was widely seen as a neutral zone dedicated to scientific research and environmental protection.

However, as geopolitical tension and economic competition has increased, so has international interest in the region – especially now that climate change may turn the route, once only feasible for a few months of the year, into a safe shipping channel for energy exports.

Having alternate shipping routes is all the more crucial as some of the world’s busiest shipping channels, like the Red Sea and Suez Canal, become increasingly dangerous. Most of the Red Sea traffic has been diverted to the Cape of Good Hope; despite being safer, this route adds 10 to 14 more days to the journey and presents a higher container loss risk.

Canada especially may be looking for different routes to export its natural gas and other commodities as it tries to decrease its reliance on the US; Canada currently uses US ports as transhipment hubs for much of its energy exports.