As the shipping industry faces mounting pressure to decarbonize, nuclear power is emerging as a potential low-carbon alternative to traditional fuels. While renewables and alternative fuels such as ammonia, hydrogen, and biofuels are part of the solution, they face challenges related to scalability, energy density, and availability—making it difficult to fully replace fossil fuels for deep-sea shipping. Nuclear propulsion, with its ability to provide continuous, high-energy output, could be a game-changing solution. However, technological, financial, and regulatory challenges remain significant.

Technological Challenges. Despite its historical use in commercial vessels such as MV SAVANNAH and MV OTTO HAHN in the 1970s and 1980s—and its continued use in icebreakers today—nuclear propulsion for merchant shipping still faces technical hurdles. Developing small modular reactors (SMRs) for commercial vessels requires significant investment in miniaturization, shielding, and safety measures. Additionally, the industry would need to develop specialized safety standards, training programs and infrastructure to safely operate and maintain nuclear-powered ships.

Financial Barriers. The high upfront costs of nuclear propulsion remain a major challenge. Nuclear-powered ships require substantial capital investment in reactor design, construction, and crew training, making them a financially risky proposition for shipowners. Financing such projects would likely require government support, public-private partnerships, or new financial instruments to de-risk investment.

Notably, since SMRs can generate energy without refueling for periods longer than the average lifespan of a vessel, an emerging concept under consideration is for SMRs to be owned and financed by specialized companies, allowing them to be transferred between ships or even repurposed for onshore power generation. This leasing model could make nuclear propulsion more financially viable and adaptable.

Regulatory Challenges. Nuclear propulsion notably faces significant regulatory hurdles. 

A major challenge is the absence of an international framework governing the civil liability of nuclear-powered vessels, creating uncertainty and potentially prohibitive insurance costs. Many coastal states currently prohibit nuclear power generation, further complicating operations across different jurisdictions.  Additionally, specific safety standards globally recognised must be developed, covering reactor containment, waste management, and emergency response protocols.

Without a harmonized international regulatory framework, nuclear-powered ships could face severe restrictions, limiting their feasibility for global trade. In the absence of such a framework, private agreements backed by national governments would be necessary to address liability and jurisdiction to allow commercial nuclear vessels to sail and enter ports. This is not easy.

Thankfully, a growing coalition of governments, classification societies, marine insurers, and industry stakeholders are collaborating to establish a clear regulatory framework that could pave the way for the adoption of nuclear propulsion in commercial shipping. 

Conclusion. Overcoming these technological, financial, and regulatory obstacles will require industry-wide collaboration, policy incentives, and advancements in nuclear technology. If these barriers can be addressed, nuclear propulsion could play a critical role in the decarbonization of global shipping.