European Commission backs homegrown Small Modular Reactors to boost EU energy security

On 10 March 2026, the European Commission published its Strategy for the development and deployment of Small Modular Reactors (SMRs) in Europe (SMR Strategy), as part of a wider Energy Package aimed at boosting investment in homegrown clean energy solutions, increasing resilience and reducing energy prices. The press release announcing the adoption of the SMR Strategy was also accompanied by a Q&A.

Together with other measures aimed – among other things – at incentivising private investment in clean energy solutions (see the Clean Energy Investment Strategy) and designing an energy system that puts citizens at the centre (see the Citizens Energy Package), these new strategies signal the importance of the supply of homegrown, affordable and clean energy in achieving the EU’s strategic goals of industrial competitiveness, independence and decarbonisation. 

Key takeaways

• The SMR Strategy targets delivery of first-of-a-kind SMR installations by the early 2030s, aiming to build a European industrial supply chain and signalling the EU’s stance towards the role of nuclear technologies as part of its long-term strategic industrial and decarbonisation agenda.

• Emphasis is on deploying SMR projects on time and on budget through an integrated EU programme that prioritises a “Made in Europe” modular nuclear supply chain (including fuel cycle services) or at least balanced cooperation on non‑EU designs, promotes standardisation and regulatory cooperation to shorten construction times, and aligns with wider industrial policy to reduce strategic dependencies.

• The Commission seeks to mobilise the significant investment needed for SMRs by using public de-risking tools and EU financial instruments to crowd in private capital, encouraging Member States to pool resources (including through Important Projects of Common European Interest (IPCEI) status and net-zero acceleration “SMR valleys”).

• The SMR Strategy proposes measures to strengthen the SMR industrial ecosystem by easing export control procedures for intra‑EU trade in SMR technologies and protecting European intellectual property, investing in skills through a Net‑Zero Academy, creating regulatory sandboxes to support deployment of selected designs, etc.

Background

The Energy Package delivers on the Affordable Energy Action Plan, adopted on 26 February 2025 as part of the Clean Industrial Deal (see also our previous blog post), which set out key actions to reduce energy costs for households and enterprises, strengthen Europe’s competitiveness and reduce energy dependencies. The Energy Package also builds on the Commission’s recent Industrial Accelerator Act proposal (see our previous blog post), by promoting a competitive European supply chain for SMRs.

The political impetus for the deployment of SMRs in Europe is well-established. The Draghi Report called for unprecedented levels of public and private investment in the energy sector and advocated a technology-neutral approach — encompassing renewables, nuclear, hydrogen, batteries, energy efficiency and CCUS — to develop an overall cost-efficient system (see our previous blog post). On nuclear specifically, it recommended maintaining nuclear supply and accelerating the development and deployment of new nuclear technologies. Subsequently, President Ursula von der Leyen confirmed in her 2025 State of the Union Address that “what brings prices down is clean homegrown energy”, and that the EU “needs to generate more homegrown renewables — with nuclear as a baseload.” At the Nuclear Energy Summit that was held on 10 March 2026, she further stated that renewables and nuclear are most powerful when in combination, and that the ambition is for new nuclear technology to be operational in Europe by the early 2030s, playing a key role alongside traditional nuclear reactors in a flexible, safe and efficient energy system. 

Steps to support nuclear development were already underway prior to the Energy Package, including the insertion of nuclear energy as a potential environmentally sustainable activity under the EU Taxonomy (see our previous blog post), amendments to State aid rules to expand support for nuclear fission and fuels, and the launch of the European Industrial Alliance on Small Modular Reactors (Alliance) in February 2024. On 13 June 2025, the Commission published the Eighth Nuclear Illustrative Programme (PINC), estimating that nuclear energy will require investments of around EUR 241 billion until 2050 with additional investments needed for new nuclear technologies, including SMRs and fusion (on the latter, see the Commission’s call for evidence). The final PINC Communication was published on 10 March 2026 as part of the Energy Package.

With this Energy Package, the Commission presents industrial strength and energy affordability as mutually reinforcing drivers of Europe’s long-term competitiveness and resilience, marking a new phase for the clean energy transition. In the Commission President’s own words, “the nuclear tech race is on.”

The SMR Strategy: an overview

The EU case for SMRs rests on their versatility and complementarity with other energy sources. Important to note that, under the term “SMR”, the Commission refers equally to light water SMRs, Advanced Modular Reactors (AMRs) and Microreactors. Combined with renewables and large-scale nuclear, SMRs can provide a flexible energy mix that supports grid stability and load balancing. According to the Commission, by delivering low-carbon electricity and heat, SMRs can directly support the decarbonisation of hard-to-abate sectors — including chemicals, steel, refineries, maritime transport, defence and district heating — while alleviating pressure on electricity grids from growing demand, including from data centres, low-carbon hydrogen and synthetic fuels production, and water desalination. Microreactors could further serve industrial sites, ports, airports, mining sites and defence or disaster relief operations. 

To develop and deploy SMRs in Europe, the Commission presents a series of concrete actions divided into three areas of focus: 

• mobilising the EU industry for SMR development and deployment; 

• catalysing financing in the relevant value chains; and 

• ensuring a supportive political environment.

1. Mobilising the EU industry for SMR development and deployment

The Commission proposes to focus on the deployment of concrete SMR projects within an integrated European programme. The Commission refers to the 2025–2029 Strategic Action Plan, adopted by the Alliance in September 2025, as an actionable programme for industry to deliver first SMRs on time and on budget. At the same time, some of the most advanced LW-SMR projects on which the Alliance focuses are based on designs of non-EU origin; while deploying these in the EU is consistent with the early 2030s objective, the Commission warns that a “balanced and mutually beneficial cooperation with the technology holders and like-minded partner countries” is essential. In addition, the Commission considers that AMRs require a specific push for further development.

The Commission also wants to focus on strengthening the European supply chain for modular and serial production. For the Commission, a competitive European supply chain should secure a high degree of local content and European added value across all SMR projects, including fuel cycle services such as enrichment and conversion. 

Finally, the Commission calls stakeholders to develop modular manufacturing for SMRs, industrial standardisation and regulatory cooperation in licensing as ways to enable shorter construction times compared to traditional nuclear plants. The Commission is aware that the nuclear supply chain needs to be revitalised after decades of limited new-builds. SMR developers working on similar designs should explore collaboration.

The terminology employed by the Commission, such as EU origin and local content (“Made in EU” / “Made in Europe”), is reminiscent of the rules recently proposed under the draft Industrial Accelerator Act (see our previous blog post). The Commission sees the draft Act as contributing to a competitive European supply chain and to reducing EU dependencies on Russian uranium enrichment and conversion services (in line with the objectives of REPowerEU).

2. Catalysing financing in the relevant value chains

The Commission’s final Nuclear Illustrative Programme (PINC) on nuclear investment needs, which was mentioned above, estimates that around 241 billion EUR will be needed by 2050 to deliver on EU countries’ nuclear ambitions. It also highlights the need for additional investment to realise the potential of SMRs. Indeed, the SMR business model depends on achieving serial production, which in turn lowers the financing cost per unit. Developing this production capacity requires significant upfront investment. 

To address this challenge, the SMR Strategy sets out two main strands of action that should help catalyse the financing for the development of the SMR value chain. 

First, the objective is to use public support to mobilise private capital, including through de-risking instruments, such as guarantees for investments in first-of-a-kind SMR projects. Existing EU instruments, such as InvestEU and the Innovation Fund, already provide mechanisms that support this. The European Investment Bank (EIB) Group intends to provide more than 75 billion EUR of financing over the next three years in support of energy transition objectives, including SMRs. To further support the first commercial units of innovative nuclear technologies, the Commission will create an additional temporary InvestEU top-up of 200 million EUR in de-risking guarantees for SMR deployment within the EU. In parallel, the new Scaleup Europe Fund aims to invest in the most promising European companies in strategic technology areas. The SMR Strategy also promotes the use of tripartite agreements between off-takers of electricity and heat, the nuclear industry and Member States, to facilitate access to financing.

Second, Member States are encouraged to pool resources behind common SMR projects. The Commission mentions at least two mechanisms that could be put in place to provide this kind of coordinated support, namely qualifying innovative nuclear technologies projects as “Important Projects of Common European Interest” (IPCEI) to receive state aid or the creation of Net-Zero Acceleration “SMR Valleys” (see our previous blog post) designed to streamline permitting and licensing processes for activities related to the manufacturing or assembly of SMRs.

3. Ensuring a supportive political environment

The SMR Strategy also sets out public policy initiatives to build and protect the industrial supply chain for SMRs. First, it aims to remove barriers to intra-EU flows of data, technology and equipment, and to protect European intellectual property (IP). Technologies and components needed for SMRs are often categorised as dual-use items, which can hinder intra-EU trade. The Commission calls on Member States to simplify and speed up export control procedures between Member States for SMR projects. The Commission will also explore how to protect European IP developed for SMRs. Member States are also encouraged to establish an EU Net-Zero Academy for Nuclear Technologies, including SMRs, to help retain skills and build up a qualified workforce. 

Second, the Commission plans to establish an “SMR coalition” covering policy, regulatory, licensing and economic aspects of selected SMR designs, with the aim of facilitating the introduction of the Alliance’s selected SMR designs across their territories. The Commission will also assist Member States in developing regulatory sandboxes for SMRs.

Third, the Commission will continue to deepen cooperation with non-EU like-minded partners, including the International Atomic Energy Agency and the OECD Nuclear Energy Agency.

Other measures under the Clean Investment Strategy

Next to the SMR Strategy, the Clean Energy Investment Strategy is intended to help bridge the gap between available private capital and the investment needed for the deployment of clean energy. It is not limited to SMRs or other innovative clean energy technologies, but also targets energy efficiency and grid improvements. The Clean Energy Investment Strategy aims to mobilise large-scale institutional private capital by:

1. improving access to capital markets for grid operators (distribution system operators and transmission system operators);

2. supporting access to finance for operators by strengthening the ability of banks to lend;

3. providing targeted public funds to de-risk innovative clean energy technologies and energy-efficiency investments;

4. establishing an Energy Transition Investment Council, comprising representatives from investors (including institutional investors) and other financial institutions, Member States and senior Commission officials. 

The Clean Investment Strategy also reiterates the EIB Group’s support through de-risking of investments in line with the SMR strategy, and the associated fuel cycle facilities and supply chain.

What now?

The SMR Strategy confirms that the Commission now sees nuclear technologies as part of the EU’s long-term strategic and autonomous industrial and decarbonisation agenda. Its success will depend on whether the proposed funding tools, policy initiatives and supply chain measures are implemented quickly enough to bring the first SMR commercial projects to market in the early 2030s.

If you would like to discuss any aspect of the Energy Package, please reach out to the contacts on this post, or to your usual Linklaters contact.