SMR and Fusion Energy: Regulatory Compliance for Next-Generation Nuclear

The nuclear energy landscape in 2026 looks fundamentally different from a decade ago. Small modular reactors are moving from design certification to construction. Fusion energy companies are building demonstration plants with private capital measured in billions. And the regulatory frameworks that will govern these technologies are being written and rewritten in real time.

For companies developing, constructing, operating, or supplying components for SMRs and fusion devices, the compliance environment is both consequential and uncertain. The NRC is adapting decades-old licensing frameworks to accommodate technologies that did not exist when those frameworks were written. Grid operators are preparing for new generation sources with different operational profiles. Export control regimes are being tested by international interest in advanced nuclear technology. Understanding this evolving compliance landscape is essential for any company in the next-generation nuclear space.

The SMR deployment wave

Three SMR developers are furthest along the US licensing and deployment pipeline:

NuScale Power completed NRC design certification for its VOYGR power module in January 2023 — the first SMR to achieve this milestone. Despite the cancellation of the Carbon Free Power Project at Idaho National Laboratory, NuScale has pivoted to international deployments and alternative US sites. Each VOYGR module produces 77 MWe, with plants configurable from one to twelve modules. NuScale’s design uses conventional light-water reactor technology in a smaller, passively safe configuration.

X-energy is developing the Xe-100, an 80 MWe high-temperature gas-cooled reactor using TRISO fuel. The Xe-100 is under NRC review and has secured deployment agreements with Dow Chemical for industrial process heat at the company’s Seadrift, Texas facility. X-energy’s reactor operates at temperatures high enough to serve industrial applications beyond electricity generation — a characteristic that introduces compliance considerations around process safety and chemical facility co-location.

Kairos Power is constructing Hermes, a non-power demonstration reactor using fluoride salt coolant and TRISO fuel, at Oak Ridge, Tennessee. Hermes received an NRC construction permit in 2023 — the first new reactor construction permit issued in the US since 1978. Kairos is pursuing a phased approach: Hermes demonstrates the reactor concept, followed by Hermes 2 (a two-unit plant producing electricity), and then commercial deployment.

Additional SMR developers including TerraPower (Natrium sodium-cooled fast reactor, under construction in Kemmerer, Wyoming), GE Hitachi (BWRX-300, a simplified boiling water reactor), and Holtec International (SMR-300) are at various stages of licensing and site preparation.

NRC licensing pathways for SMRs

SMR developers navigate one of three NRC licensing frameworks:

• 10 CFR Part 52 (Combined Licence): The established pathway for new reactors, combining construction and operating authorisation. NuScale and most light-water SMRs use this framework. It requires a design certification or a combined licence application that includes site-specific design information. The process is well understood but lengthy — design certification reviews have historically taken 4-6 years.

• 10 CFR Part 50 (Construction Permit): The traditional two-step process. Kairos Power’s Hermes uses this pathway, obtaining a construction permit first and an operating licence separately. This approach allows construction to begin before the full operating licence review is complete, which can accelerate deployment timelines for demonstration projects.

• 10 CFR Part 53 (Technology-Inclusive Framework): Finalised in 2024, Part 53 provides a risk-informed, performance-based licensing framework designed to accommodate non-light-water reactor designs without forcing them into frameworks built for conventional pressurised and boiling water reactors. Part 53 uses a two-framework approach — Framework A for deterministic licensing and Framework B for risk-informed performance-based licensing. Advanced SMR and fusion developers are expected to increasingly use Framework B.

Each pathway carries different compliance requirements for safety analysis, environmental review, emergency planning, and security. Part 53’s performance-based approach potentially allows smaller emergency planning zones and different security postures for inherently safer designs, but licensees must demonstrate through quantitative risk analysis that their designs justify these alternative requirements.

Fusion energy: an emerging regulatory frontier

Fusion energy companies have raised over $7 billion in private capital and are racing toward demonstration systems:

• Commonwealth Fusion Systems is constructing SPARC, a compact tokamak using high-temperature superconducting magnets, in Devens, Massachusetts. SPARC aims to demonstrate net energy gain — more fusion energy out than heating energy in — by 2027. The subsequent ARC commercial plant is targeted for the early 2030s.

• TAE Technologies has operated successive plasma devices through its Norman, Copernicus, and Da Vinci machines. TAE’s approach uses field-reversed configuration plasma, a fundamentally different confinement method from the tokamak mainstream.

• Helion Energy is building its Polaris prototype, targeting electricity demonstration by 2028 under a power purchase agreement with Microsoft. Helion uses a pulsed field-reversed configuration approach and aims to capture energy directly from the fusion plasma rather than through a conventional steam cycle.

• Zap Energy is developing a sheared-flow stabilised Z-pinch approach that eliminates the need for external magnets, potentially enabling a smaller and simpler fusion device.

The NRC issued a policy statement in 2023 establishing that fusion energy systems will be regulated under a framework distinct from fission reactors. Specifically, the NRC determined that fusion devices do not require regulation under the Atomic Energy Act’s framework for “utilisation facilities” (the legal basis for fission reactor licensing) unless they use or produce special nuclear material above threshold quantities.

This means most fusion devices will be regulated under a byproduct material framework — a significantly lighter regulatory touch than fission reactor licensing. However, the specific regulatory requirements are still being developed through rulemaking. Fusion companies must track and engage with this rulemaking process to ensure their compliance programmes align with final requirements as they emerge.

Key regulatory considerations for fusion include:

• Tritium handling: Deuterium-tritium fusion requires handling tritium, a radioactive isotope regulated under NRC byproduct material rules. Tritium inventory, containment, monitoring, and waste management all carry compliance obligations.
• Neutron activation: D-T fusion produces 14.1 MeV neutrons that activate structural materials, creating radioactive waste. The volume and activity level of this waste determines disposal pathway requirements.
• Occupational radiation safety: Workers at fusion facilities will require radiation protection programmes, dosimetry, and training under NRC requirements.
• Environmental review: NEPA environmental impact assessments will be required for fusion facility construction, though the scope may be narrower than for fission reactors given the absence of meltdown risk and long-lived actinide waste.

NERC CIP for next-generation nuclear generation

Every SMR or fusion plant connected to the bulk electric system will fall under NERC CIP requirements. For SMR developers, this creates compliance planning obligations during the design phase — network architecture, control system segregation, and cybersecurity by design must account for NERC CIP from the outset.

Several SMR characteristics create novel NERC CIP considerations:

• Multi-module plants: A NuScale VOYGR-12 plant with twelve reactor modules and a shared control room presents different BES Cyber System boundaries than a single large reactor. The CIP-002 asset categorisation for multi-module facilities requires careful analysis of which systems are shared versus module-specific.
• Remote monitoring and autonomous operation: Several SMR designs envision reduced staffing through automation and remote monitoring. NERC CIP-005 electronic security perimeters and CIP-006 physical security requirements must accommodate remote access architectures without creating cybersecurity vulnerabilities.
• Industrial co-location: SMRs providing process heat to industrial facilities (like X-energy’s deployment at Dow Chemical) create interconnected networks between the nuclear plant and the industrial customer. The boundary between NERC CIP-regulated systems and the industrial facility’s operational technology must be clearly defined and enforced.
• Microgrids and islanded operation: Some SMR deployments — military bases, remote communities, mining operations — may operate islanded from the bulk electric system. NERC CIP applicability depends on interconnection to the BES, and islanded facilities may have different compliance profiles.

ITAR and export controls for advanced nuclear technology

International interest in US-developed SMR and fusion technology triggers export control analysis under multiple regimes:

• 10 CFR Part 810: DOE authorisation required for transferring unclassified nuclear technology to foreign persons or entities. Part 810 distinguishes between generally authorised destinations and specifically authorised destinations, with different compliance requirements for each.
• ITAR (USML Category XVI): Nuclear weapons-related design and testing equipment. While commercial SMRs and fusion devices are not weapons systems, technology overlaps in areas like enrichment, tritium production, and neutron physics can create ITAR jurisdiction questions.
• EAR (Nuclear Referral List): The Commerce Control List includes nuclear-related dual-use items in Category 0. Reactor components, fuel cycle equipment, and nuclear-grade materials may require Bureau of Industry and Security licences for export.
• IAEA Additional Protocol: International safeguards obligations for nuclear material and activities, implemented through NRC and DOE reporting requirements.

For SMR developers pursuing international deployments — NuScale in Romania and Poland, X-energy in Canada and Jordan, GE Hitachi in Canada and the UK — export control compliance is integral to the business model. Each international deployment requires Part 810 authorisation, and the technology transfer scope must be carefully defined to ensure compliance with all applicable export control regimes.

Fusion technology export controls are less established but emerging. As fusion companies pursue international partnerships and component sourcing, they must assess whether their technology — particularly in areas like tritium handling, superconducting magnets, and plasma diagnostics — triggers nuclear or dual-use export control requirements.

Building compliance programmes for technologies still being licensed

The unique challenge for SMR and fusion companies is building compliance programmes for regulatory frameworks that are themselves still being finalised. NRC Part 53 is new. Fusion-specific rules are in development. NERC CIP interpretations for multi-module and remote-monitored facilities are evolving through precedent.

AuditDSS covers the nuclear compliance stack — NRC licensing requirements, NERC CIP standards, ITAR export controls, and EPA environmental frameworks — providing next-generation nuclear companies with structured regulatory mapping as these frameworks evolve. For SMR developers and fusion startups managing compliance across multiple regulatory domains simultaneously, a systematic approach to tracking obligations, identifying gaps, and demonstrating compliance readiness is essential for maintaining licensing timelines and investor confidence.

The companies building the next generation of nuclear energy are solving extraordinary engineering challenges. They should not have to solve the compliance mapping challenge from scratch as well. The regulatory complexity of nuclear energy is the price of operating in the most consequential energy sector in the world — and managing that complexity systematically is what separates companies that deploy from companies that stay in the laboratory.