US Teams With British Firm on Nuclear-Powered Fleet to Rival China

The U.S. is preparing a push into nuclear-powered commercial shipping, partnering with a British company on plans for a new merchant fleet intended to challenge China’s growing dominance of global shipbuilding.

The U.S. Maritime Administration is set to sign a public-private partnership with London-based Core Power to accelerate the development of nuclear propulsion for commercial vessels.

Stephen Carmel, administrator of the U.S. Maritime Administration, told the Financial Times that Washington was seeking to compete through technology rather than by attempting to match Chinese shipyards on cost.

“We are not going to beat China by being a cheaper version of China. They have mastered the art of being cheap,” Carmel said.

A Technology-Led Shipbuilding Strategy

The agreement is intended to establish the conditions for a U.S.-flagged nuclear-powered fleet, including faster licensing, insurance availability, port access and common safety standards.

It does not guarantee federal funding.

Core Power, headquartered in London and with a relationship with the Port of Corpus Christi in Texas, plans to begin construction of its first nuclear-powered vessel in 2028.

The company says it has raised about $200mn from investors including Mitsui, Mitsubishi and Sumitomo.

For Washington, the project forms part of an effort to revive a domestic shipbuilding industry that has been heavily weakened by lower-cost Chinese competition while redirecting U.S. nuclear expertise toward commercial shipping.

“The way we win in all this is to change the terms of the competition to something that is more favorable to us,” Carmel said. “So, we don’t compete on trying to be cheap. We compete on technology . . . and nuclear technology is something we are really good at.”

Nuclear Propulsion Moves Beyond the Military

Nuclear propulsion has been used for decades in military submarines, allowing vessels to operate for extended periods without conventional refueling while maintaining high sustained speeds.

Commercial adoption has remained limited because of high construction costs, restrictions on port access and complicated international liability rules.

Russia currently operates the largest nuclear-powered fleet, largely through its use of nuclear icebreakers in the Arctic.

The U.S. has recently taken additional steps toward commercial nuclear shipping.

In June, the American Bureau of Shipping approved the design of a nuclear-propelled vessel developed by the Maritime Consortium of the Massachusetts Institute of Technology.

Senior U.S. officials are also due to meet counterparts from the UK, France, Japan, South Korea and other countries at an International Atomic Energy Agency event in Washington to discuss nuclear maritime technology.

Core Power Sees Large Replacement Market

Mikal Bøe, Core Power’s chief executive, said the strategic case for nuclear-powered merchant vessels was strengthening as China also moved toward the technology.

He argued nuclear ships could compete economically with fossil-fuel propulsion because they could travel 50 to 75 percent faster, carry more cargo and avoid environmental taxes.

“There are 8,200 vessels that are suited to nuclear propulsion that need to be replaced over the next 25 years . . . I think we can meet 10 to 20 percent over this period,” Bøe said.

Core Power estimates that nuclear-powered vessels could achieve lifetime costs comparable with conventional shipping fuels at roughly $500 to $600 per tonne.

Insurance and Liability Remain Obstacles

Technical advances have removed some barriers to commercial nuclear shipping, but shipowners still question vessel costs and the liability arrangements that would apply after an accident.

Insurance is among the most immediate constraints.

Themistoklis Sapsis, professor of mechanical and ocean engineering at the MIT consortium, said progress in reactor design had improved safety but international regulatory alignment would be essential if nuclear-powered ships were to move between national jurisdictions.

Public acceptance of nuclear vessels entering commercial ports is another unresolved issue.

Shipping Economics Would Have to Change

Nuclear propulsion would also alter the financial model used across commercial shipping.

Under the existing system, the company chartering a vessel typically pays for fuel consumed during a voyage. A nuclear-powered ship would instead receive fuel when built, with that fuel potentially lasting for more than 20 years.

That would require owners, charterers and investors to develop a different system for allocating capital and operating costs.

Peter Jameson, managing director at Boston Consulting Group, said this could open a role for investment funds to finance the large upfront capital expenditure instead of leaving owner-operators to fund nuclear reactors from their own balance sheets.

Crew availability presents another constraint. The industry would need additional nuclear engineers and new training programs for existing seafarers.

Despite the new U.S. initiative, most executives do not expect nuclear-powered commercial ships to enter service before the 2030s.