Nuclear ships only pay off under the IMO’s net-zero rules, UCL study finds
Without the IMO Net-Zero Framework, no nuclear vessel beats a conventional ship, even at the lowest reactor costs. With it, nuclear can be the cheapest option from 2040, but only if reactor costs fall to levels not yet demonstrated.
London, Tuesday 27th October 2026 – Nuclear propulsion can compete in container shipping only if an effective global emissions policy is in place and reactor costs fall sharply, according to new research from the UCL Energy Institute’s Shipping and Oceans Research Group. It is one of the most detailed total cost-of-ownership assessments of nuclear merchant shipping to date.
The report, "Nuclear Reactors for Merchant Shipping: A Total Cost of Ownership Assessment of a Low-Carbon Pathway", compares a large container ship (14,500 to 19,999 TEU) with nuclear propulsion against conventional fuel oil and dual-fuel ammonia vessels. It uses a literature review, interviews with five UK-based experts in law, insurance, classification, technology development and industry representation, and a cost model run with and without the IMO Net-Zero Framework (NZF).
Key findings
Policy sets the business case. Without the NZF, no nuclear vessel is cheaper than a conventional ship, even at the lowest assumed reactor cost. Under the NZF, nuclear vessels earn income by selling surplus units to other ships, which closes the gap.
Reactor cost decides the outcome. Published estimates range from about 2,600 to 12,400 USD per kWe, a spread of nearly five times. At the low end, which assumes series production and deep cost reductions, nuclear is the cheapest option from 2040. At the high end, which reflects first-of-a-kind reactors, it is not cheapest in any scenario.
The window is narrow. Surplus unit income is largest when a vessel enters service and shrinks as the NZF’s fuel targets tighten. Nuclear’s best chance to break into the market is early, not late.
Faster is not cheaper. At 25 knots, the vessel sails 32% more distance a year but needs more than three times the installed power, and costs rise.
Non-technical barriers are as large as the technical ones. Existing nuclear liability conventions were designed for fixed, land-based reactors. Interviewees expect no global framework for the first vessels, and a mature insurance regime could take 15 to 20 years.
"Nuclear can compete, but only with much cheaper reactors and a global emissions policy, and neither exists yet. How both develop over the coming years will decide whether nuclear has a place in shipping.”
Farah Bziker, Researcher, UCL Shipping and Oceans Research Group.
Three features of the NZF support nuclear as a maritime energy source: a stringent fuel-intensity limit or steep reduction rate to ensure long-term demand; a stable, high-integrity surplus-unit market with a firm price; and a strong, sustained reward for zero- and near-zero-emission technologies. Policy that is less ambitious or less supportive of these technologies than the NZF will reduce nuclear’s potential.
"Nuclear is not a reason to weaken maritime climate policy. It is one of the technologies that depends on it. Anyone backing reactor programmes should want a stringent international GHG policy and credible global framework”
Dr Tristan Smith, Professor of Energy and Transport, UCL Shipping and Oceans Research Group
The authors caution that the results may understate the true cost of nuclear shipping. The model excludes nuclear-specific insurance, reactor maintenance and hull integration, and treats decommissioning as a rough estimate. Vessels with first-of-a-kind reactors are not competitive, and it remains open who would bear their cost. A favourable cost comparison is also not enough: the first vessels will need agreements between states on liability, insurance and regulation.
