Sean Duffy's MARAD initiative resembles past Trump-era energy dominance efforts, but behind the politics is a crucial industrial concern: can the United States establish the necessary regulations, shipyard capabilities,...
Sean Duffy's MARAD initiative resembles past Trump-era energy dominance efforts, but behind the politics is a crucial industrial concern: can the United States establish the necessary regulations, shipyard capabilities, insurance, and port infrastructure to make nuclear-powered merchant ships commercially feasible before Asian nations take the lead?
According to Paul Morgan (gCaptain) – The significant aspect of the announcement made by U.S. Transportation Secretary Sean P. Duffy and the Maritime Administration on May 7 is not about a newfound interest in nuclear propulsion. Instead, it highlights that Washington has acknowledged maritime nuclear power as a shipbuilding, logistics, insurance, port access, and national security challenge, committing to engage in it. MARAD's Request for Information, with comments due by August 5, 2026, seeks input from the industry to develop a U.S.-built, scalable, commercially feasible Small Modular Reactor (SMR) model for marine transport. This goal is much broader than just funding a reactor demonstration; it aims to create a complete commercial ecosystem.
The importance of this initiative was highlighted by MARAD Administrator Stephen Carmel, who noted that successfully introducing SMRs requires viewing it as a system transition rather than merely a technology demonstration. This assertion captures the essence of the challenge: the reactor itself isn't the main issue. The real difficulty lies in whether ports, insurers, classification societies, regulators, shipyards, and cargo owners can collectively make nuclear-powered merchant ships a normal part of commercial shipping.
Shipping is particularly well-suited for nuclear propulsion. The energy density advantage of nuclear power in maritime applications is more compelling than in most other transport sectors. A modern ultra-large container ship uses between 250 and 350 tons of fuel daily while at sea. Over a 25-year operational period, fuel costs can reach billions of dollars. The infrastructure required for traditional fuel storage, treatment systems, and emissions compliance takes up massive amounts of space and resources. Nuclear propulsion could simplify this by providing a reactor that lasts for two decades or more, freeing up space and returning efficiency to shipping operations.
Ships are also in a better position than trucks or planes to handle the demands of nuclear propulsion. Merchant vessels already operate complex power systems with trained engineering crews. They spend long periods at sea, away from populous areas, and have the structural capacity to accommodate shielding and reactor compartments. The economics of shipping favor energy density, which is why nuclear naval vessels have safely operated for decades. Transitioning from military to civilian applications is feasible if the right support structures are created. Lloyd’s Register has suggested that SMRs could lead to longer-lasting, emissions-free ships if regulatory obstacles are tackled. DNV has pointed out that standardization and mass production are key to making this economic shift viable.
A Small Modular Reactor is a compact fission plant that typically generates up to 300 megawatts, assembled in transportable modules. It operates on the same chain-reaction principle as traditional nuclear plants, but modern SMR designs include passive safety features, eliminating risks from active mechanical failures. Many designs can cool naturally even if power is lost.
Thorium is being discussed as an alternative fuel source, offering additional benefits. Thorium-232 transforms into fissile uranium-233 when bombarded by neutrons and is three to four times more abundant than uranium, producing less long-lived radioactive waste and being less prone to weapon proliferation risks. Molten salt reactors, which mix thorium with liquid fluoride salt that also cools the system, operate at atmospheric pressure, reducing the risk of explosive decompression. In 2025, an initial approval was granted for a nuclear-powered LNG carrier utilizing this technology.
The Duffy initiative comes amid a significant decline in American commercial shipbuilding capacity. The U.S. now only accounts for about 0.1 percent of global commercial ship production. A single Chinese state shipbuilder produced more vessels by tonnage in 2024 than the entire U.S. industry has since 1945. China currently dominates around 70 percent of new ship orders, while South Korea leads in advanced LNG and high-specification vessels. Japan remains a quality manufacturer. The U.S. has lost its competitive edge in commercial shipbuilding outside naval projects, which is why the MARAD announcement frames SMR development as a way to revitalize domestic shipyards, create strategic engineering jobs, and link maritime and defense industries.
The contrast with Europe is notable. The European Union has approached shipping decarbonization primarily through carbon pricing and compliance penalties, pushing shipowners towards LNG, methanol, ammonia, and hydrogen, which have uncertain long-term viability. In contrast, Washington is advocating for industrial rebuilding, nuclear-powered logistics, strategic shipbuilding, energy independence, and dense domestic energy production. While Europe debates how to tax shipping emissions, the United States is focusing on who will build and power the next generation of vessels.
South Korea is not waiting for U.S. answers. HD Hyundai has introduced a concept for a 15,000 TEU-class SMR-powered containership and is collaborating with ABS on nuclear-electric propulsion systems that could produce up to 100 megawatts. China is exploring molten salt reactor ship concepts and investing heavily in thorium-based systems. Russia operates the only nuclear-powered commercial vessels currently in service. The IAEA’s ATLAS initiative is working on a regulatory framework for civil nuclear applications at sea, and the IMO has begun updating its 1981 Code of Safety for Nuclear Merchant Ships. The Nuclear Energy Maritime Organisation was established in 2025 to set global standards. The U.S. is entering a race that has already started.
Duffy's announcement claimed that SMRs would significantly reduce fuel costs and maintenance needs. While this assertion is valid, the overall formulation oversimplifies the reality. Nuclear fuel is inexpensive compared to its energy output, but the total lifecycle cost includes reactor capital expenses, shielding, specialized crew training, inspections, nuclear security, decommissioning, spent fuel management, insurance costs, and compliance with evolving regulations. MARAD’s RFI acknowledges these complexities by specifically asking about liability frameworks, insurance structures, port access, legal pathways, and back-end fuel-cycle solutions. These are not secondary issues but represent the real commercial challenges, as demonstrated by the NS Savannah case from 60 years ago.
The Savannah functioned well from a technical standpoint, but required a larger crew than conventional ships, needed financial support throughout its operation, and was taken out of service in 1971 due to a lack of the necessary commercial framework. Port authorities demanded governmental negotiations for entry, and dock workers were hesitant to handle cargo due to radiation concerns. Similar challenges were faced by West Germany’s NS Otto Hahn and Japan’s NS Mutsu. These are not just historical anecdotes; they reflect the specific hurdles the MARAD RFI is asking the industry to help overcome. The insurance issue is especially daunting: if a conventional vessel runs aground, insurers understand the risks; however, if a nuclear-powered vessel does so near populated areas, potential liability becomes nearly impossible to assess under existing frameworks.
According to DNV’s analysis, commercial viability for nuclear shipping may not emerge until around 2045. Therefore, the critical takeaway from this initiative isn't that nuclear power will provide an immediate solution to the industry's decarbonization challenge. Instead, shipowners making long-term fleet decisions today need clarity on whether nuclear propulsion will be commercially available before they commit long-term to LNG, methanol, ammonia, or hydrogen infrastructures. The past decade has seen the industry seeking cleaner fuels, and Washington may now indicate that the true solution lies not in finding a new fuel but in moving away from combustion entirely. The real question remains whether this administration can maintain the political support, industrial investment, and interagency collaboration required to affirm that message before the next election cycle.