Amid today’s growing nuclear optimism, the industry may be overlooking a massive opportunity in decarbonizing global shipping. Over the summer of 2024, major players in the international maritime sector launched new studies and signed partnership agreements aimed at using small, advanced reactors to curb the industry’s heavy emissions by 2050. Groups like the American Bureau of Shipping (ABS), Korea Research Institute of Ships and Ocean Engineering (KRISO), and Lloyd’s Register (LR), along with major companies like Maersk and Samsung Heavy Industries, are now actively exploring how SAMRs could transform the shipping sector. Nuclear-powered propulsion for ships is not a new concept, having been used for about seven decades in naval vessels, icebreakers, and a few state-owned civilian ships. While commercial use is nonexistent today, SAMR vendors and shipping companies alike are charting a course to equip large cargo ships with SAMRs, offering increased shipping capacity, faster speeds, and stable fuel and operating costs, all with zero emissions. Given this surge of activity, this week’s cover story takes a closer look at the latest state of the nuclear-powered shipping space to understand its potential future impact on the nuclear industry.
Impetus – The shipping sector is being pushed to decarbonize by the UN’s International Maritime Organization (IMO), which regulates shipping safety, security, and environmental practices. IMO has set a 2050 mandate for the shipping sector to become carbon neutral. However, the global shipping sector is currently wholly reliant on fossil fuels. IMO estimates the sector emits 1 billion metric tons of CO2 annually – equivalent to 3% of global greenhouse gases (GHGs). “The challenge of maritime decarbonization is not that it is happening, but that it needs to happen so quickly,” notes a publication issued in July by London-based maritime firm and underwriter LR. Therefore, energy-dense, carbon-free SAMRs could be the key to accelerating progress toward meeting IMO’s decarbonization goal.
Headwinds – All shipping companies and maritime organizations advancing nuclear shipping analyses agree that a massive barrier to the widespread adoption of SAMRs on ocean-going vessels is a lack of harmonized international regulatory frameworks. While regulations for land-based reactors are well-established, specific rules for SAMRs in maritime applications are still under development. IMO’s International Convention for the Safety of Life at Sea (SOLAS) outlines basic requirements for nuclear-powered vessels, but both the maritime nuclear and shipping industries agree that SOLAS’ standards must be updated to reflect advances in reactor technology and safety protocols. Shipping industry groups have called upon IMO and the International Atomic Energy Agency (IAEA) to devise common sense safety standards that can foster a mounting wave of new SAMR technologies, while ensuring requirements are flexible enough to adapt as the SAMR shipping industry grows. Similarly, work is now underway to drive a new risk framework to allow nuclear-propelled commercial ships to call at commercial ports. While this work is ongoing, LR emphasizes, “Nuclear powered naval vessels regularly receive permission to visit civilian ports and have done so for decades without incident.”
Another key factor preventing the successful adoption of nuclear-powered shipping is a lack of public and stakeholder acceptance amid resistance due to ongoing comfort with conventional fossil-fueled shipping. To address this, global shipping leaders are launching investigations into the best ways to deliver the message to the public and other stakeholders that nuclear-powered vessels are safe, eliminate carbon emissions, and significantly reduce other harmful GHGs, like sulfur oxides and nitrogen oxides. Most crucially, the shipping and nuclear industries must avoid major maritime accidents, such as the recent MV Dali incident, which collided with the Francis Scott Key Bridge in Baltimore causing a section of the bridge to collapse and disrupting deliveries of all goods – including nuclear fuel – to the port.
Tailwinds – Though many factors limiting SAMRs’ adoption in shipping are beyond the nuclear industry’s control, one way the nuclear sector can strengthen the case for nuclear-powered cargo ships is by advancing the technological readiness of SAMR designs. LR contends that successful deployments of small PWR-based SAMRs on stationary barges, like Rosatom’s FNPP in Russia’s Far East, will be vital to nuclear energy’s eventual penetration into the global shipping sector. As the commercial nuclear maritime industry matures, LR, ABS, KRISO, and others foresee advanced reactor designs taking market share from barge-based PWRs, particularly led by SAMR types including microreactors, molten salt reactors (MSR), and lead-cooled fast reactors (LFR). LR notes that SAMRs could reduce the average size of ships by increasing capacity while allowing ships to operate at higher speeds with minimal cost increases, with all these enhancements producing zero emissions. Additionally, SAMRs could extend the lifespans of oceangoing vessels, with industry analysts estimating the potential for huge cargo ships to last up to 50 years compared to the current average of 20-30 years, thereby reducing overall operating costs.
Fuel costs are a key advantage for the nuclear shipping sector, as Tier 1 shipping companies’ profitability is often heavily impacted by diesel price volatility. This is because diesel fuel accounts for between 30-60% of cargo ship OPEX. LR contends that switching massive cargo ships’ propulsion systems from diesel engines to SAMRs will cost more upfront, but SAMRs’ longer operational lifespan, multi-year refueling intervals, and fuel cost stability improves the economic case for nuclear ships over time. Nuclear-powered cargo ships could feasibly operate for several years without refueling, which reduces or eliminates the industry’s current reliance on bunkering infrastructure and curbs fuel price volatility, thus giving global shipping companies clear visibility on long-term operating costs. Thus, international shipping mega-companies are full steam ahead on feasibility studies to understand the economic impact posed by leasing SAMR propulsion systems on a “power-by-the-hour” basis to gain predictability in total energy cost for a ship’s service life.
As seen in the graphic, UK-based maritime nuclear engineering company Core Power conducted an analysis on the use of nuclear propulsion for ships ranging from 10,000 to 24,400 TEU (20-foot equivalent units), focusing on high and low CAPEX and OPEX scenarios for nuclear-powered vessels traversing along the Asia-Europe trade route. The study assumes replacing a diesel powertrain with heat-pipe microreactors and compares the energy consumption of Very Low Sulphur Fuel Oil (VLSFO) vessels, estimating SAMR OPEX between $15/MWh and $35/MWh. To remain economically competitive with diesel, the report finds that the total cost of each reactor, including operational and insurance expenses, should not exceed $3.8 billion over 25 years – higher than current SAMR cost estimates. Core Power anticipates SAMRs delivered in the early 2030s could have CAPEX of around $500 million, with prices dropping as production scales, although OPEX data remains elusive. Meanwhile, ABS is studying the economic feasibility of deploying either two 30 MWe LFRs on a 14,000 TEU container ship or four 5 MWe heat-pipe microreactors on a 157,000 DWT Suezmax tanker, with initial results finding that all SAMR deployment scenarios increase total container capacity, boost sailing speed, and eliminate refueling for 25 years.
Next Steps – Clearly, the development of nuclear-powered oceangoing vessels is advancing, as indicated by partnerships signed this summer between shipping companies, maritime agencies, and nuclear engineering firms. In July, ABS and South Korea’s KRISO agreed to advance commercial SAMR-powered ships jointly, with ABS analyzing regulatory guidelines and international standards, while KRISO will focus on developing core technologies, including vessel designs, propulsion systems, and safety frameworks. Furthermore, in August, Maersk teamed with Core Power and LR to study the feasibility of nuclear propulsion in container shipping, seeking to understand regulatory frameworks and draft new safety protocols. The project aims to evaluate the potential for SAMRs to help the industry achieve net-zero emissions and transform global shipping over the next 10 to 15 years.
Nuclear power holds immense potential to revolutionize the shipping industry. As technology advances and regulatory frameworks evolve, nuclear-powered ships appear poised to become a viable option for decarbonizing global trade. Indeed, the future of nuclear-powered shipping is promising, but it will require an unprecedent scale of collaboration, innovation, and commitment across various industries, some of which are very new to nuclear, to go full steam ahead into a new, bigger, faster, cleaner nuclear-propelled shipping future.
This article was originally published in the September 24, 2024 issue of the Ux Weekly.
Philip Johnson is UxC, LLC’s Senior Vice President, Fuel Cycle. In his current capacity, Philip is a key contributor to many UxC publications, with a distinct focus on the front-end of the nuclear fuel cycle. Mr. Jonson also works on the demand and policy sides of the nuclear industry, researching next-generation nuclear technologies, as well as the future of non-grid applications for nuclear energy like hydrogen, direct air capture, process heat, and nuclear desalination, among others. Philip has been interviewed by a number of leading publications during his tenure at UxC, including The Wall Street Journal, TED, Investing News, and others, as well as being a guest on the highly acclaimed Titans of Nuclear Podcast in 2022. He holds a Bachelor’s degree in Economics from Georgia State University's Andrew Young School of Policy Studies, as well as a minor in English.