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The Inflation Reduction Act (IRA) is changing existing renewable energy tax credits into a technology neutral tax credit that supports any facility that does not produce greenhouse gases. Starting January 1, 2025, these will transition to the Clean Electricity Production Credit (section 45Y) and the Clean Electricity Investment Credit (section 48E) for new projects.

On May 29, the Treasury and IRS announced the proposed rule on how this tax credit would be implemented.

Last year, the Fusion Industry Association submitted comment letters advocating for the inclusion of fusion energy in these new credits.

The proposed rule recognizes a list of several technologies that meet high enough environmental standards to qualify for these credits. The specific types of facilities with a GHG emissions rate of zero or less that would be eligible for these credits include wind, solar, hydropower, geothermal, nuclear fission, fusion energy, and certain types of waste energy.

The explicit inclusion of fusion energy in the IRA tax credits is important in providing certainty to developers and their shareholders about the future development of fusion as a commercial energy source. Furthermore, it is important that fusion energy is recognized as a qualifying technology on its own and not as part of any “Advanced Nuclear” designation. Fusion energy is substantially different from nuclear fission; fusion has different benefits, costs, and risks, thus should receive separate treatment.

The FIA looks forward to submitting formal comments in support of this designation.

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• Definitions of Key Terms:
  • The FIA acknowledges the NRC’s updated definition of “particle accelerator” now explicitly includes fusion systems. However, the FIA suggests that the NRC adopt a more straightforward definition proposed by the FIA and by pending legislation in Congress
• Preliminary Draft Guidance (NUREG-1556 Volume 22):
  • Applicability: The FIA stresses that the guidance should clearly state its applicability only to commercial fusion machines and not to research and development (R&D) fusion machines. This distinction is crucial to avoid disrupting ongoing and future licensing activities.
  • Technology-Inclusive and Risk-Appropriate Approach: The guidance should be inclusive of various fusion technologies. The FIA points out specific sections where the guidance is overly prescriptive, particularly concerning tritium handling and heat removal systems. They recommend revisions to allow flexibility for different fusion machine designs.
  • Focus on Radiological Safety: Some parts of the guidance, such as construction monitoring and acceptance testing for power supplies and magnets, go beyond radiological safety and should be revised to focus strictly on safety-relevant systems.
• Stakeholder Engagement and Collaboration:
  • The FIA commends the NRC for its robust stakeholder engagement throughout the rulemaking process. This engagement is essential for developing a durable regulatory framework that supports the safe and effective advancement of commercial fusion technology.

Overall, the FIA’s letter highlights the industry’s commitment to working collaboratively with the NRC and other stakeholders to ensure a regulatory framework that fosters the safe and innovative development of fusion energy technologies.

This letter emphasizes the that the NRC is well on its way to ensuring a balanced and effective regulatory approach for fusion energy development. For further details, you can read the full letter below.

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The European Commission recently published a report analyzing a strategic public-private partnership (PPP) approach to foster innovation in fusion energy titled Analysis on a strategic public-private partnership approach to foster innovation in fusion energy.

There is an increasing recognition that public funding alone is not sufficient for developing viable commercial fusion energy. As other countries around the world initiate their own PPPs to accelerate fusion technology, an EU PPP for fusion could address the need for continued innovation, and retaining know-how, competitiveness and leadership in fusion.

The report confirms that existing funding instruments are sufficiently flexible and advises against creating completely new instruments which would require significant political, legal and other actions. Three separate and complementary funding opportunities are identified for industrial innovation in fusion and should be pursued in parallel:

• Create a Co-Programmed European Partnership (CPEP) for fusion innovation under the Horizon Europe program before its next budget in 2028. This would complement other innovation partnerships while reserving 25% of funds for additional EU fusion firms with high-risk/high-potential approaches to scale.
• Start an Innovation Partnership through Fusion for Energy (F4E) to evolve the focus towards industrial innovation. The program would support the development of key enabling technologies, reprioritizing available budgets to use towards mandated DEMO objectives.
• Ensure funding availability for fusion start-ups in the EU including SMEs in the supply chain. This can be achieved through Horizon Europe’s EIT-KIC InnoEnergy instrument. As key enabling technologies are developed, more tools such as the Innovation Fund, Breakthrough Energy Catalyst, European Investment Bank (EIB) and other funds will become more relevant.

Taking steps towards an EU fusion innovation strategy, the EU should propose a Strategic Research and Innovation Agenda (SRIA) which defines the main areas of focus and milestones to be achieved. The report also recommends communicating with industry to establish an EU representative organization. The FIA welcomes this suggestion and believes it would be the right candidate for this role.

The report is available below or on the European Commission’s website.

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Inertial Confinement Fusion research, which supports laser inertial fusion research at the National Ignition Facility and elsewhere, received $690 million in a separate budget allocation, through the National Nuclear Security Administration (NNSA). Congress provides $690 million for Inertial Confinement Fusion, a $60 million increase over 2023.

Put together, the $1.48 billion funding for fusion will be a record amount from the U.S. government. In the difficult budget environment of a divided Congress, the FIA congratulates Representatives Fleischmann and Kaptur, the Chairman and Ranking Member of the HouseEnergy & Water Appropriations Subcommittee, and Senators Murray and Collins for increasing support to fusion. The FIA also thanks the Fusion Caucus and the members who pushed for funding to be pushed far higher than what was achieved.

Research Funding Should Increase and Focus on Commercialization

Unfortunately, this funding is not enough – and is not prioritized sufficiently towards commercialization – to capitalize on the scientific breakthroughs happening in fusion around the world. Congress, the Department of Energy, and the U.S. fusion community agree that the best way for the U.S. to take lead on fusion energy is to significantly increase funding for fusion research and development, as outlined in the President’s FY24 Budget Request and the bipartisan Fusion Energy authorizations in the CHIPS and Science Act of 2022. The FIA supports full funding in line with these requests and signed a letter along with 75 institutions in the fusion community asking for funding. 72 Representatives and 15 Senators also signed letters requesting full funding for fusion.

If Congress continues to find that increasing fusion funding to the levels defined in the CHIPS and Science Act is not a priority, there is a plan. In 2020, the fusion community delivered a long range plan to the Department of Energy that identified ways to continue to make progress on fusion, even at the constant levels of effort that Congress continues to provide. This FESAC report specifically says that failing to increase funding “will cost the US its position as a global leader in fusion energy and plasma science and will compromise future developments with important societal implications.” Further on, it highlighted that under a level funding program that budget constraints means there must be strategic choices in funding. A budget aligned with the FESAC report should prioritize commercial facing efforts.

Congress requested the FESAC report to help it prioritize its spending. Since the report was delivered in 2021, Congress has not yet made significant changes or prioritization of current programs. The addition of the milestone-based public-private partnership is an important addition, but the rest of the FES program should be prioritized towards commercialization. In the coming years, Congress should follow through and fund the programs identified by the fusion community as priorities.

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The Fusion Energy Act would amend the Atomic Energy Act of 1954 to add a new definition of “fusion machines” as particle accelerators. That clarification would confirm in law the unanimous, bipartisan decision that the Commissioners of the Nuclear Regulatory Commission (NRC) made in April 2023 determining that fusion would be regulated separately from nuclear fission.

The FIA understands that there will be changes to the text of the fusion portions of the legislation as it is reconciled with Senate-passed legislation, and the FIA has worked with House and Senate staff to ensure that these changes provide the most clarity and regulatory certainty to industry, while also protecting public safety and security.  

The FIA has consistently supported regulatory and legislative efforts to provide certainty in the regulation of fusion energy. The FIA supports efforts to permanently and completely separate the regulation of fusion energy from the regulation of fission. The FIA endorses passage of the Atomic Energy Advancement Act when it is considered on February 28, and looks forward to working with Members of Congress to see it enacted into law. The letter FIA sent to the House Energy and Commerce Committee is embedded below.

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The FIA has had EU-based members since its inception, and many members from around the world have engaged in direct partnerships with entities sponsored by EuroFusion and Fusion for Energy, as well as national governments within Europe.

For decades, European scientists have been leaders in the science and development of fusion energy. In recent years, the EU has begun work to design a DEMO fusion power plant, even as work continues on ITER in France. Now, as the fusion energy economy transitions from labs to the marketplace, Europe will have to transition its policies and programs as well. The EU will soon embark on an effort to build new public-private partnerships to support fusion, and the FIA will be eager to support these policies.

As the unified voice of the fusion industry, the Fusion Industry Association is excited to expand its presence in Europe in support of our members and the wider fusion ecosystem. As Director for the EU, Cyrille will be responsible for growing and managing the FIA’s presence in Brussels, implementing the FIA’s strategy and advocacy in the context of the Europes’s fusion ecosystem, and educating stakeholders in industry, politics, and the press about the promise of fusion energy. Cyrille brings with him extensive experience in clean energy, policy, and strategy.

The FIA’s priorities around the world are to build the public-private partnerships that will accelerate fusion, ensure that the regulations of fusion energy are permanently separated from nuclear fission, and ensure that fusion energy gets the same benefits that all other clean technologies receive.

Cyrille Mai Thanh has worked for the past eight years in public affairs in Brussels during which he has developed a strong knowledge on EU policies related to climate and energy. Cyrille brings valuable experience working at Dentons Global Advisors, a leading public affairs consultancy, where he advises corporate clients on a broad range of policy issues. He helps clients navigate the EU political landscape, anticipate regulatory changes, and design advocacy and communication strategies. Cyrille is also founder of the Brussels Sustainability Club, a network gathering over 200 public affairs professionals from across sectors with a common interest in sustainability policies. Cyrille studied European Studies at The Hague University and speaks English, French and Spanish.

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The Biden Administration has made fusion policy a priority, by announcing a Bold Decadal Vision for Commercial Fusion Energy, including fusion in the Net-Zero Game Changers Initiative, and requesting $1 billion in the 2024 budget for fusion research. However, Congress has yet to act on the budget and the DOE needs to act with more urgency:

Now is not the time to take a step backwards. As you prepare to submit the budget for 2025 to Congress, the Department of Energy’s (DOE) request must continue to support full-funding for Fusion Energy Sciences (FES), as outlined by the CHIPs and Sciences Act, and must also prioritize closing the scientific gaps in fusion technology – including in materials sciences and the fusion fuel cycle – as outlined in the Fusion Energy Sciences Advisory Committee’s Long-Range Plan (LRP).

FIA Letter, January 11, 2024

The FIA supports the recently announced vision of FES Associate Director Jean Paul Allain to rework the programs within the Office of Science, but to achieve the goal of fusion deployment within a decade, more urgency is needed.

If the U.S. waits, other nations are already accelerating their pathway to fusion energy. In China, they recently announced the creation a new national champion, the “China Fusion Corporation” by saying “China takes the lead!”

With this letter, the FIA and its member companies stand ready to support Secretary Granholm and the Administration when they request the funding that Congress has authorized and the fusion community supports to prioritize accelerating the commercialization of fusion energy.

Meanwhile the FIA has also supported efforts to ensure that the 2024 budget request gets the support it needs and eagerly awaits action by Congress.

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In a series of meetings in October and November, the NRC outlined proposed changes that would clarify fusion energy regulation under 10 CFR, Part 30 for accelerators and the guidance they would issue on how to regulate fusion.

The Fusion Industry Association (FIA), as the voice of the private fusion industry, has been directly engaged as a stakeholder with the NRC in the process that has led to this rulemaking, and will continue to represent the fusion industry before the NRC. On July 17 2023, the NRC issued a “Notification of Proposed Rulemaking” on the Regulatory Framework for Fusion Energy Systems after the announcement in April 2023 of the Commission’s unanimous vote to regulate fusion separately from nuclear fission. The FIA will continue to engage with the NRC as it completes this rulemaking process over the coming years, culminating with the anticipated publication of the rule for comment in March 2025. More details are available on the NRC’s fusion website.

As the FIA has consistently articulated during this process, the Commission’s April 2023 decision specifically was clear in its intent: it called for a “limited-scope rulemaking.”

In this letter, the FIA suggests that the limited scope rulemaking should focus primarily on establishing definitions in regulations, in particular the definition of particle accelerators and the definition of fusion machines.

The Commission’s decision to regulate fusion in Part 30 relies on the legal understanding that all fusion machines meet the definition of particle accelerators. However, the Staff’s proposed rule does not explicitly add fusion to the definition of Particle Accelerator. Our proposal is simple: explicitly add “fusion machines” to the definition of Particle Accelerator.

On how to define a “Fusion Machine,” the FIA agrees with the intent to limit the definition to specific components rather than adopt a facility-wide definition. However, the FIA is concerned the proposed definition is still overly broad and ambiguous. For example: the phrase “associated radiation [and] radioactive material” could be read to describe material such as activated components that are awaiting disposal or spare tritium fuel in storage.

FIA Letter

Particle Accelerator

“Particle accelerator means any machine capable of accelerating electrons, protons, deuterons, or other charged particles in a vacuum and of discharging the resultant particulate or other radiation into a medium at energies usually in excess of 1 megaelectron volt, including fusion machines. For purposes of this definition, accelerator is an equivalent term.”

The italicized text is FIA’s proposed addition to 10 C.F.R. § 30.4

Fusion Machine

“The term ‘fusion machine’ means a machine that is capable of—

(1) transforming atomic nuclei, through fusion processes, into other elements, isotopes, or particles; and

(2) directly capturing and using the resultant products, including particles, energy, heat, and other electromagnetic radiation, for a commercial or industrial purpose.”

The full letter is below. In the future, the FIA will have further points of discussion on the guidance that the staff is proposing for how to implement this new regulation

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The amendment would amend the Atomic Energy Act of 1954 to define fusion as a particle accelerator. That clarification would confirm in law the unanimous decision that the Commissioners of the NRC made in April determining that fusion would be regulated separately from nuclear fission. As the Commission continues its efforts to write regulations on fusion energy, this bill will confirm that. Furthermore, the legislation requests a report from the NRC on a regulatory process for mass-manufactured fusion machines – including an evaluation of the Federal Aviation Administration’s design, manufacturing, and operations certification process.

The FIA has consistently supported regulatory and legislative efforts to provide certainty in the regulation of fusion energy. The FIA supports efforts to permanently and completely separate the regulation of fusion energy from the regulation of fission. The FIA congratulates the House Energy and Commerce Committee for passing this legislation and looks forward to working with Members of Congress to see it enacted into law.

With passage, the bill will now be reported to the House floor for a vote. If passed there, the House and Senate will have to reconcile the differences between this bill and S.1111, the ADVANCE Act, passed by the Senate as a part of the National Defense Authorization Act.

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