UCL Study: Nuclear-Powered Ships Will Only Be Viable Under IMO's Net-Zero Framework

A study by the UCL Energy Institute, conducted through its Shipping and Oceans Research Group, concluded that nuclear propulsion in merchant vessels is not competitive against conventional fuels unless the International Maritime Organization (IMO) puts its Net-Zero Framework (NZF) into effect and, in addition, reactor costs are significantly reduced. According to the research, without the NZF no nuclear-ship scenario manages to be cheaper than a conventional vessel, even assuming the lowest reactor cost considered in the analysis.

The paper, titled 'Nuclear Reactors for Merchant Shipping: A Total Cost of Ownership Assessment of a Low-Carbon Pathway,' compared a 14,500–19,999 TEU containership with nuclear propulsion against equivalent conventional fuel oil and ammonia dual-fuel versions, combining a literature review, interviews with five UK-based experts, and a cost model. According to the published breakdown, a conventional vessel costs $119.6 million under the model, compared with $148.5 million for the ammonia-fueled version, while the nuclear equivalent ranges from $228 million in the most optimistic scenario to $582 million for first-generation reactor technology. Reactor costs estimated in the literature range from $2,600 to $12,400 per kWe, a nearly fivefold difference between the low and high ends.

The study argues that, under the NZF, nuclear-powered ships could generate revenue by selling surplus emissions units to other vessels, which would close the cost gap and allow nuclear power to become the most economical option starting in 2040, provided reactor costs fall at the lowest end of the estimates. However, that advantage from selling surplus units would be greatest when the ship enters service and would gradually diminish as the framework's own fuel targets tighten, which is why the researchers note that the best opportunity for nuclear technology lies in early market entry, not a late one.

The report also examined the argument that nuclear propulsion would allow ships to sail faster to gain competitiveness: at 25 knots, a vessel covers 32% more distance annually than at 14.85 knots, but requires more than triple the installed power, which drives up costs and cancels out that advantage. Added to this are non-technical obstacles that the authors consider just as significant as the technical ones, since current nuclear liability conventions were designed for fixed land-based reactors and not for ships crossing international borders; the experts consulted do not expect a global framework to be in place for the first such vessels and estimate that a mature insurance regime could take between 15 and 20 years to develop.

Farah Bziker, a researcher with the UCL Shipping and Oceans Research Group, stated that nuclear power can compete, but only with much cheaper reactors and a global emissions policy, and that neither condition exists yet. Professor Tristan Smith, from the same research group, noted that nuclear power is not an argument for weakening maritime climate policy, but rather a technology that depends on it. The report comes as the IMO is set to hold the 85th session of the Marine Environment Protection Committee (MEPC 85) from November 30 to December 3, with the possibility of agreeing on the NZF, whose adoption had failed the previous year, while the United States, a prominent opponent of that framework, has recently backed several projects to develop nuclear propulsion domestically.