EU drafts first fusion energy strategy as private sector gains pace

For decades, European fusion energy policy has meant one thing: ITER, the vast international reactor under construction in Cadarache, southern France. Now the European Union is preparing to do something it has never done before: publish a strategy for the commercial deployment of fusion power.

A strategy born from competitiveness concerns

The political impetus came from an unlikely source. Mario Draghi, the former European Central Bank president, was tasked by the European Commission with diagnosing Europe's competitiveness problem. His report, published in September 2024, did not confine itself to banking or trade. It called explicitly for an overarching innovation strategy to commercialise fusion energy in Europe, arguing that fusion could deliver clean, secure and abundant power essential for the continent's competitiveness, decarbonisation and energy security.

That recommendation has moved from paper to policy. The EU is now preparing its first Fusion Strategy, intended to outline a vision for commercialising fusion energy across the bloc. The strategy is expected to address regulatory clarity, investment signals and the coordination of public and private efforts, areas where Europe has lagged behind the United States and China.

The shift matters because fusion has historically been treated as a research challenge rather than an industrial one. EU funding, institutional architecture and regulatory frameworks have all been oriented around ITER and the scientific goal of demonstrating net energy gain. The new strategy signals that Brussels now recognises commercial deployment as a separate problem requiring different tools. The European Commission's press office has confirmed that work on the strategy is under way, though its precise contents remain undisclosed.

National programmes outpace Brussels

One of the strategy's central challenges is that several member states have already moved ahead on their own. Germany has become a focal point for private fusion development. Proxima Fusion, a spin-off from the Max Planck Institute for Plasma Physics in Munich, is developing a compact stellarator design. Focused Energy, another German company, is pursuing laser-driven inertial confinement fusion. Renaissance Fusion, based in Grenoble and Munich, is working on magnetised target fusion. All three are represented at the stakeholder session.

France hosts ITER and maintains extensive national fusion research infrastructure through the Commissariat à l'énergie atomique et aux énergies alternatives. Sweden has been active in pushing for stronger European coordination, with Anders Lindholm, counsellor on research at the Swedish permanent representation to the EU, engaged in the dossier. The United Kingdom, though no longer an EU member state, operates its own Spherical Tokamak for Energy Production (STEP) programme, aiming to build a prototype fusion power plant by 2040.

The risk for Brussels is clear. If national governments and private companies build their own regulatory environments and supply chains without coordination, the single market fragments. If the EU strategy is too prescriptive, it slows the frontrunners. If it is too vague, it changes nothing.

The regulation problem

Perhaps the most consequential question the strategy must address is regulatory. Fusion is not fission. A fusion reactor cannot melt down in the way a fission reactor can. It produces no long-lived radioactive waste. Its fuel, typically isotopes of hydrogen such as deuterium and tritium, is fundamentally different from enriched uranium or plutonium. Yet in most EU member states, fusion devices are regulated under nuclear frameworks designed for fission.

The fusion industry argues that this creates disproportionate barriers. Building and testing a prototype fusion device under fission-era licensing procedures is slow, expensive and, in the view of many companies, unjustified by the actual risks. The Fusion Industry Association, which represents private fusion developers globally, has been making this case in Brussels. Olga Bakardzhieva, its EU director, is among those pressing for a proportionate regulatory regime that would allow prototype devices to be built and tested without the full burden of fission regulation.

The United States has already moved in this direction. The US Nuclear Regulatory Commission decided in 2023 to regulate fusion machines under a less onerous framework than fission reactors, a decision that private companies welcomed as a signal that America was open for fusion business. Europe has made no comparable move, and the absence of regulatory clarity is one reason investment has flowed disproportionately to American companies.

Private investment follows permissive regimes

The investment numbers tell their own story. The Fusion Industry Association's annual global survey has tracked a sharp rise in private capital entering the sector, with cumulative investment reaching several billion dollars by the mid-2020s. The majority of that capital has gone to companies in the United States, where the regulatory environment is more favourable and the Department of Energy runs dedicated programmes to support private fusion development.

European companies have attracted investment too, but at a smaller scale. If the EU strategy does not create conditions that allow European companies to compete for capital, the consequence is straightforward: fusion technology will be developed elsewhere, and Europe will buy it rather than produce it. That is precisely the competitiveness trap Draghi warned about.

The presence of Eni and St1 at the stakeholder session is instructive. Eni, the Italian energy major, has invested in fusion companies and represents the kind of industrial partner that can bridge the gap between laboratory experiments and commercial power plants. St1, a Finnish energy company, brings a similar perspective from northern Europe. Both are signals that incumbent energy companies see fusion as a plausible part of the future energy mix, not merely a research curiosity.

ITER and the funding tension

ITER remains the dominant force in European fusion policy, and the biggest consumer of EU fusion funding. The project, a collaboration among the EU, China, India, Japan, South Korea, Russia and the United States, is designed to demonstrate that fusion can produce more energy than it consumes. It has been under construction since 2010, is years behind schedule and billions of euros over budget. Fusion for Energy, the EU body that manages Europe's contribution to ITER, is among the participants at the April session.

ITER's supporters argue that it remains essential: without demonstrating net energy gain at scale, the commercial case for fusion collapses. Its critics counter that ITER's scale and timeline are misaligned with the commercial pathways private companies are now pursuing. Compact, modular reactor designs could reach the market faster than ITER's vast tokamak, and the companies developing them need funding and regulatory support now, not in the 2040s.

The EU strategy will need to manage this tension without pretending it does not exist. ITER has political support from seven domestic agencies and international partners, and it cannot be cancelled without diplomatic consequences. But it also cannot be the sole pillar of European fusion policy if commercial deployment is the goal.

What the strategy must deliver

The stakeholder session on 28 April 2026, co-organised by the Clean Air Task Force and the Fusion Industry Association as part of the EU Sustainable Energy Days, will not produce the strategy itself. But it will reveal how far apart the various actors are on fundamental questions. Should fusion be regulated separately from fission? How much public money should flow to private companies, and through what mechanisms? What role should large energy incumbents play? Can the EU move quickly enough to keep its companies competitive with American and Chinese counterparts?

Sehila M. Gonzalez de Vicente, global director for fusion energy at the Clean Air Task Force, has framed the discussion around strategic, commercial and industrial considerations converging. Bayern Innovativ, the Bavarian innovation agency, will bring a regional perspective on connecting research with industry. The International Centre for Theoretical Physics in Trieste, also represented, highlights the role of international scientific networks.

The strategy will also need to address workforce. Fusion requires expertise in plasma physics, materials science, superconducting magnets, tritium handling and advanced manufacturing. Europe trains many of the world's fusion scientists, but retaining them and directing them toward commercial deployment rather than academic research requires different incentives. Without a clear industrial pathway, talented researchers will continue to gravitate toward American and Asian programmes that offer them.