9 minute read | March.26.2026
After several years of analysis—and direction from Congress—the U.S. Nuclear Regulatory Commission (NRC) recently issued a proposed rule (and accompanying guidance) that formalizes the regulatory path for fusion. This rulemaking does not represent a change in direction. Rather, it translates prior Commission decisions and the mandate of the ADVANCE Act into a practical licensing framework that can be applied to near-term fusion projects.
For developers, investors and other stakeholders, the rule’s significance lies in the clarity it provides. At its core, the NRC has formalized in the proposed rulemaking that fusion will not be regulated like fission. Instead, it will be licensed under the Part 30 byproduct material framework, lowering barriers to early deployment while placing greater responsibility on developers to establish and support their safety case.
By confirming that fusion will be regulated under a materials-based framework, the Commission has defined the technical and environmental expectations that will apply to commercial facilities. First-of-a-kind projects—many of which will be licensed through Agreement States rather than directly by the NRC—now have a clearer and more predictable pathway forward. And, at the same time, the rule establishes a more defined set of technical and environmental expectations that applicants will need to meet.
For an industry moving toward first commercial deployment, the focus is shifting from uncertainty about the regulatory approach to execution within a defined framework.
The proposed rule establishes a technology-inclusive, performance-based framework for licensing fusion machines by adapting the NRC’s existing materials licensing regime. Rather than creating an entirely new regulatory structure, the NRC is modifying and clarifying existing regulations to explicitly encompass fusion technologies.
The framework focuses on radioactive materials produced or used in fusion systems, including tritium and activation products, rather than on the fusion machine itself as a complex engineered system. As a result, the regulatory emphasis is on protecting workers and the public from radiation exposure, controlling and monitoring radioactive materials, managing waste streams and effluents, and addressing environmental impacts associated with licensed activities.
At a high level, the proposed rule does three things:
The proposed rule includes targeted revisions across multiple parts of Title 10 of the Code of Federal Regulations, including Parts 20, 30 and 51, and aligns key definitions with the ADVANCE Act.
Importantly, the NRC is also issuing draft guidance (NUREG-1556, Volume 22) to accompany the proposed rule. This guidance provides detailed expectations for applicants and reflects a risk-informed, performance-based approach to demonstrating safety.
A defining feature of this framework—and one that will shape how fusion is deployed in practice—is that it operates within the National Materials Program. As a result, many fusion facilities will be licensed not by the NRC directly, but by Agreement States implementing compatible regulatory programs.
This is not a secondary point. Several of the first proposed commercial fusion facilities—including Helion in Washington State, Commonwealth Fusion Systems in Virginia, and Type One Energy’s project with TVA in Tennessee—are expected to be licensed in the first instance by state regulators, not the NRC. While these states rely heavily on NRC regulations and guidance, they retain primary licensing authority, introducing both opportunity and variability into the regulatory landscape.
This rulemaking is the culmination of several years of policy development and statutory direction.
The Nuclear Energy Innovation and Modernization Act (NEIMA) directed the NRC to establish a regulatory framework for advanced nuclear technologies, including fusion. In response, the Commission evaluated whether fusion should be regulated as a form of nuclear power generation or under the existing materials licensing regime. In 2023, it made a decisive policy choice: fusion would be regulated under the byproduct material framework, reflecting its fundamentally different risk profile from fission.
That direction was reinforced by the ADVANCE Act of 2024, which amended the Atomic Energy Act to define fusion machines and clarify the treatment of their associated radioactive materials.
The proposed rule reflects this trajectory. It is intentionally pragmatic—designed to enable near-term deployment while maintaining safety—and explicitly leaves room for evolution as the technology scales.
The significance of this proposed rule lies as much in what it avoids as in what it creates. The framework introduces a materials-centric model of regulation that places primary emphasis on radioactive material management—particularly tritium—rather than on the broader engineering systems of the facility. By declining to impose a reactor-style licensing regime, the NRC has materially reduced the regulatory burden associated with early fusion deployment.
For developers, this creates a more workable pathway forward:
With less formal scrutiny over facility systems, environmental review will play an increasingly important role. While fusion remains within Part 30, the expanded use of Part 51 for any associated environmental review creates a pathway for deeper scrutiny as facilities scale, particularly with respect to site impacts, water usage, and waste management. In practice, environmental review may become the mechanism through which regulatory oversight expands over time.
A defining feature of this framework is that it will be implemented largely through Agreement States, meaning the primary licensing authority for many developers will be not the NRC, but a state regulator operating under a compatible nuclear regulatory program authorized by the Atomic Energy Act and approved by the NRC.
This has immediate implications. State regulators will be making first-instance licensing decisions for some of the earliest commercial fusion facilities, informed by—but not controlled by—the NRC’s guidance. Some states may offer more efficient or commercially aligned pathways, while others may require more extensive engagement to build confidence in fusion technologies.
The NRC’s proposed framework creates a meaningful inflection point for fusion developers. It offers a near-term opportunity to accelerate deployment under a favorable regulatory structure, but it also requires careful strategic positioning and disciplined execution.
In the near term, the proposed rule provides a clear and achievable pathway to licensing that is materially less burdensome than traditional reactor regulation. By anchoring fusion in the byproduct material framework, the NRC has reduced one of the most significant barriers to commercialization: regulatory uncertainty.
Developers can expect a combination of speed, flexibility and clarity that has not previously existed in the nuclear space. The performance-based structure allows companies to define their own safety cases rather than conform to prescriptive requirements, which is particularly important given the diversity of fusion technologies.
This opportunity is reinforced by the role of Agreement States. Because many early projects will be licensed at the state level, developers may benefit from more direct engagement with regulators and potentially more efficient processes—particularly in states that are actively positioning themselves to host advanced energy projects.
The same flexibility that makes the framework attractive also introduces a different kind of risk. The burden of defining and defending the safety case rests squarely with the applicant, and the system to evaluate it has not yet been tested at commercial scale.
A few themes are likely to define successful projects.
Success under this framework will depend on how developers position themselves now.
Licensing strategy should be treated as a core element of project development. In a performance-based system, the safety case must be developed alongside the engineering design, not after it. Companies that integrate regulatory considerations early will move faster and with fewer surprises.
There is also a real opportunity to shape how the framework is implemented. The NRC is actively seeking input, and early applicants—particularly those working with Agreement States—will play a significant role in establishing what “good” looks like in practice.
At a minimum, developers should be focused on three things:
Those early projects will not just be licensed—they will help define the regulatory baseline for the industry.
The NRC’s proposed rule represents a foundational step in establishing a regulatory environment for fusion energy in the United States. It reflects a deliberate effort to balance safety, flexibility and innovation, and it sends a strong signal of regulatory support for commercialization.
At the same time, this framework should be understood as the beginning of a regulatory evolution, not its endpoint. As fusion systems scale, the NRC is likely to revisit and refine its approach.
For now, however, the message is clear: the United States has created a viable regulatory pathway for fusion, and developers who move quickly—and strategically—will be best positioned to lead the next phase of the industry’s growth.