The following is from a guest author, Karolina Saladžiūtė, who is a trainee solicitor in the UK.
With increasing concerns over climate change and the finite materials of current energy suppliers, a new, more sustainable and clean way of energy is necessary to meet the increasing energy demand. Fusion energy is hailed to be the answer – its commercial usage as safe, limitless and clean energy has ‘the potential to greatly accelerate progress towards a net-zero economy’. With the growing prominence of fusion energy and its constant development (regarding technology and methods explored), a new question for investors and those involved has arisen – how should fusion energy be dynamically regulated?
US Regulatory Framework
The foundation of the US regulatory framework provides that most fusion technology is currently regulated by the Nuclear Regulatory Committee (NRC) under the Atomic Energy Act (AEA). Fusion technology is currently regulated under the Act because it consumes tritium, which is known as a ‘by-product material’ falling under the scope of the NRC. This may cause problems as it suggests that fusion energy facilities should be regulated as nuclear power plants offering stricter, more stringent rules. However, the current approach fails to recognise the critical differences between fusion and fission, such as the risks and hazards associated with each. Nonetheless, the NRC Commission has asserted that even though it has regulatory jurisdiction over commercial fusion energy devices, it must wait until the ‘commercial deployment of fusion technology is more predictable’, suggesting a lack of resource prioritisation for fusion regulation. In 2019, the US Congress legislated the Nuclear Energy Innovation and Modernisation Act (NEIMA), stating that the NRC must, by 2027, create a ‘technology-inclusive regulatory framework’ for advanced nuclear reactors, including fusion reactors. The mandate was seen as a step forward, however, it ultimately failed to provide clarity, leaving significant discretion to the NRC to satisfy the Act. Following the directive, the regulatory system has received further criticism, particularly from companies racing to commercialise fusion energy, due to the uncertainty surrounding the system and its rigid application to fusion energy.
The debate has reached its peak as the NRC staff have published the preliminary White Paper, pushing for a different regulatory framework for commercial fusion energy systems rather than fission power plants. The paper has outlined the options for regulating commercial fusion, which include regulation under the utilisation facility framework (option 1), by-product materials framework (option 2), or under a hybrid approach (option 3). Considering that fusion uses no special nuclear material, and a self-sustained chain reaction is impossible, essentially highlighting that the radiological risks are significantly lower and short-lived, option two could be sustained as the most viable option. The recommendation suggests that the NRC commissioners must decide to regulate fusion energy systems according to the by-product materials licencing approach outlined under 10 CFR part. 30 (option 2(b)). Such a method would include definitions for fusion devices, ensure a ‘technology-inclusive approach’, provide regulatory clarity across NRC, and adapt to an already existing framework, saving time. Importantly, it would allow for regulatory flexibility, which is crucial for the fusion industry, which continues to evolve, progress and expand. This was further upheld by the DOE’s participant in the NRC commissioner's 2022 November 8th hearing, stating that the commercial fusion energy projects would fit within the scope of materials licencing. The final decision by the commission is expected to be reached in the first half of 2023.
UK Regulatory Framework
As outlined in the UK government’s reports, proportionate and effective regulation has been at the forefront of the UK’s Fusion strategy. Broadly, the UK has maintained its stance to regulate fusion energy proportionately and appropriately by sustaining environmental and human protections, ensuring transparency to the public, and enabling the rapid growth and commercialisation of the clean energy industry. In 2021 the UK government published the Green Strategy Paper: Towards Fusion Energy, summarising the proposals for a regulatory framework for fusion energy in the UK and essentially calling for a ‘non-nuclear’ regulatory approach to fusion. It subsequently sought views from the public, the fusion industry, academia, etc., during a public consultation to ascertain the best route for fusion energy regulation.
Currently, the Department of Business, Energy & Industrial Strategy has come to a conclusion, stating that the current UK regulators of fusion R&D facilities – the Environment Agency (EA) and the Health & Safety Executive (HSE) will continue to regulate fusion. It stated that the hazards regarding fusion energy facilities fall within the scope of facilities regulated by EA and HSE, thus failing to warrant a change in the regulator. The government further explained that such an approach would allow for clarity and create a ‘proportionate and innovation-friendly regulatory framework’, effectively excluding fusion energy facilities from nuclear regulation. This will create a more flexible approach to fusion - highlighting its rapid development, safety (less risk than nuclear energy) and distinct nature. The government has also expressed the need for the law to reflect the diversity of fusion technologies, thus suggesting that the regulatory framework will be revisited periodically. The UK (in the near future) will use the Energy Security Bill to amend the 1965 Nuclear Installation Act, stating that fusion energy facilities are excluded from the regulatory and licencing requirements of nuclear installations.
Today’s regulatory regime, thus, can provide further certainty to investors in fusion in the UK as it demonstrates the government’s dedication to fusion energy development and understanding that different laws are needed to regulate fusion effectively.
Overall, a successful regulatory framework is indispensable to facilitate the multifaceted fusion industry growth and encourage acceleration into commercialisation. A transparent regime which recognises the specificities of fusion energy and differentiates its hazards from nuclear energy is beneficial when evaluating investment risks and consequences. At its current stage, regulation in the UK seems to suggest a more favourable ecosystem for investment. Thus, the UK’s creation of a sensible regulatory framework can be valuable in generating a sense of security for private investors, highlighting the public support for fusion and the appreciation of its rapid growth.