The International Maritime Organization (IMO) has set out a target for international shipping to achieve net zero emissions by 2050. The nuclear propulsion of ships presents an innovative, but challenging, opportunity to meet that target.
The IMO has set a target for a minimum 20% reduction of greenhouse gas emissions generated by international shipping by 2030. This target forms part of a larger strategy to decarbonise international shipping by 2050.
The FuelEU Maritime Regulation, which applies to ships carrying cargo or passengers for commercial purposes within the European Union or the European Economic Area, mandates a 2% reduction in greenhouse gas emission intensity in 2025. The reduction target will increase in stages, reaching 80% by 2050. The Regulation requires ships over 5,000 gross tonnage to meet targets for the reduction in the intensity of greenhouse gases used in fuels from 'well to wake' i.e. the emissions over the entire lifecycle of fuel production to its end-use by the ship.
Finding alternatives
Ship owners and managers have for some time been exploring technologies that will help them in their decarbonisation and greenhouse gas emission-reduction efforts. They've been considering the use of wind propulsion, and new types of rudder and propeller design and scrubbers that cleanse exhaust fumes amongst other options. But they will need to explore new fuel and propulsion technologies.
There are various factors that will weigh into the decisions they take such as the age and types of vessels in their existing fleets, trading patterns, access to preferential loans, and current and future regulations.
Alternative fuel sources such as ammonia or hydrogen present various challenges that ship owners and managers and their insurers will need to consider. Such challenges include storage requirements, toxicity (ammonia), whether ships will need to be retrofitted or built anew, whether there is sufficient infrastructure for refuelling at ports, and the unpredictability around the availability and future pricing of fuels.
Nevertheless, rapid progress is being made. Many ship owners and managers said they expect to be using two or more different fuel families by 2030, according to a survey by the Global Centre for Maritime Decarbonization, the Global Maritime Forum, the Maersk-McKinney Moller Center for Zero Carbon Shipping and consultancy firm McKinsey.
Nuclear propulsion potential
The nuclear propulsion of ships is one option under consideration. Currently, nuclear power is used in specialist ice-breaking vessels in the Arctic as well as on naval submarines. New nuclear technology is available, such as small modular reactors (SMR), which operate at atmospheric or low pressures, reducing the risk of pressure-related accidents compared with more traditional, high-pressure water reactors. But there are some significant barriers to overcome before nuclear propulsion can become more widely adopted as a means to power ships.
The wider adoption of new fuels including nuclear energy will require innovation not just in the design of engines and the fuels themselves, but in terms of advanced and comprehensive training for seafarers.
Aside from the substantial initial cost outlay in building vessels, one factor for consideration is the commercial viability of nuclear merchant ships. The 22,000 tonne NS Savannah was the first nuclear-powered merchant ship, which was commissioned and then decommissioned eight years later in 1970 as it was too costly to operate on enriched uranium.
More recently in January 2025, work began on the Nuclear Propulsion in Shipping (NuProShip) project, which examined Generation IV small modular reactor (SMR) technologies for their suitability in commercial shipping. According to the Norwegian shipbuilder, VARD, insurance companies will be involved in the second phase the NuProShip as "a critical step for evaluating the business viability of nuclear technology in the shipping industry".
Ship owners and managers would also require greater clarity on the regulations that would be needed to govern the maintenance and decommissioning of nuclear-powered vessels. While the Merchant Shipping (Nuclear Ships) Regulations 2022 addresses the operation and safety of nuclear-powered ships in the UK’s waters, the Convention on the Liability of Operators of Nuclear Ships (despite being adopted in 1962 in Brussels) has never entered into force. The International Atomic Energy Agency’s (ATLAS) project is set to establish a framework in 2025 for the safe and secure deployment of civil nuclear applications at sea.
In addition to the legal instruments required, the wider adoption of new fuels including nuclear energy will require innovation not just in the design of engines and the fuels themselves, but in terms of advanced and comprehensive training for seafarers. This is particularly true in the case of nuclear propulsion given the highly specialised knowledge and competencies that will be required.
The risk consulting and insurance response
The lack of historic data for nuclear propulsion of ships means that insurers would need to develop new models, risk assessments and pricing structures to underwrite nuclear-related liability risk. The changes to the fuel used by vessels will inevitably mean that the values of ships and the infrastructure at ports will change.
Risk consultants would need to develop their knowledge too and add expertise from professionals with a nuclear background. The potential risks associated with nuclear power may need new wordings and clauses to be developed and many countries are likely to require liability coverage.
While nuclear propulsion may help the shipping industry on its path to net zero, the viability and insurability on a global scale is a discussion to be had between across multiple stakeholders and organisations.
