Skuld participated in the Green Shipping Program (GSP) pilot study “Every stone must be turned. Nuclear power cannot be excluded.”
The industry collaboration has been led by OSM Thome and supported by GSP partners.
The future need for carbon-neutral fuels will be enormous if the IMO’s goal of net-zero emissions from shipping by 2050 is to be achieved. Vast amounts of renewable energy will be required to produce carbon-neutral fuels for ships, and no options can be excluded. All possibilities for carbon-neutral ship propulsion in the next decades must be considered.
“There has been substantial interest in participating in GSP’s nuclear power pilot, and it is clear that there is significant interest in the Norwegian maritime community regarding nuclear power. The pilot is aimed to address all the important questions that need to be clarified, and for DNV, it has been both the right approach and educational in terms of contributing to the construction and operation of a future nuclear-powered ship in a safe and secure manner” – Eirik Ovrum, Principal Consultant, DNV
“In the pilot, the aspect of insurance has been particularly interesting to learn more about, including the challenges, possible solutions, and seeing that the Norwegian marine insurance industry is an active and inquisitive party that wants to contribute to the success of the maritime industry’s green ambitions.” – Torbjørn Lie, Pilot project leader and Business Development Manager, OSM Thome
Nuclear risks, and thereby also the use of nuclear fuel, are excluded in marine insurance policies and for this to change, international agreements and conventions need to be developed. In addition to such developments, the insurance industry will independently have to consider whether such risks are something they are prepared to cover, and mapping the risks will be an important step in this process.
Skuld’s contribution
As a contributing partner to the pilot, Skuld has been shedding light on the International Group structure and how this influences the potential of nuclear fuel. The pooling agreement and the common purchase of reinsurance will affect the development of the rules for the International Group.
International conventions must be developed and ratified for nuclear power to become a viable insurable option. The 1962 Brussels Convention is a potential starting point and was intended to be applicable to nuclear-powered merchant vessels. However, the convention was never ratified, and it was also written during the height of the Cold War, with no Chernobyl and Fukushima events to influence the perception of nuclear options. The definition of nuclear risk would need an update to include environmental risks, which were never mentioned in the convention.
“Nuclear is an interesting zero-emission option that can meet IMO ambitions for 2050, support energy demand, and be a viable technological possibility. As insurance excludes nuclear fuels and lacks international conventions to change this, we welcome insight and a new debate on the topic. The pilot project allows us to get a basic insight into the risks associated with nuclear fuel. We have to mature as an industry to allow the industry to discuss nuclear as one of the many options for reducing missions” – Matias Bøe Olsen, Decarbonisation and Transition risk lead, Skuld
If we hypothetically assume that nuclear vessels have access to P&I cover, then cover for nuclear risks would impact almost all risks covered by P&I, such as people claims, pollution, wreck removal and cargo. This would likely be seen as an increase in risk from an underwriting perspective and would affect the premium. Any inclusion of nuclear risk would also have to be approved by the reinsurers as their exposure would increase, and such incidents could easily exceed the Pool retention of the Group cover.
For the moment, insurance is a showstopper for nuclear propulsion with current rules and regulations. A new debate and discussion around all aspects of nuclear in the maritime value chain are seen as an essential step towards the industry maturing on the topic. Insights, like this report, are welcome to increase awareness amongst insurance and reinsurance peers. We have already seen the nuclear topic become an agenda point in IMO and other important regulatory forums.
“Nuclear reactors were actually used on ships before they were used on land, but since the beginning, it has been about various types of light water reactors. These reactors are challenging to use in commercial ships for various reasons, and therefore, the project has studied and selected a set of advanced reactors (Generation IV) that are now under development. We strongly believe that by 2035, the first commercial ship with advanced reactors can be in operation”. – Jan Emblemsvåg, Ph.D., Professor, Norwegian University of Science and Technology (NTNU)
Skuld’s Decarbonisation Competence Hub
For more information or questions about this pilot study or Skuld’s decarbonisation efforts, please contact Matias Bøe Olsen or Martin Øhre, Skuld’s Decarbonisation Competence Hub (DCH).
Skuld’s DCH supports shipowners in navigating the transition to low-carbon operations while positioning Skuld as a strategic partner in maritime decarbonisation. It focuses on building internal expertise, supporting underwriters and clients, and actively engaging with industry initiatives such as the Green Shipping Program.
Source: Skuld