High energy prices are hurting Europe’s tech hopes. Average electricity prices for heavy industries in the European Union remain roughly twice those in the US and 50% above those in China. Germany now has the developed world’s highest domestic electricity prices.  

The energy crisis drags down energy-intensive investments in data centers. It hurts European firms trying to train and run large energy-intensive AI models.   

Fusion could help close the gap. It is a clean form of nuclear energy. By fusing light hydrogen atoms, fusion releases heat without the long-lived radioactive waste produced by traditional nuclear power. Fusion fits well with the EU’s ambitious climate goals; it is a zero-carbon source of power that can complement renewables, reduce dependence on imported fuels, and provide high-temperature heat. Former Italian Prime Minister Mario Draghi’s influential competitiveness report prioritizes fusion in Europe’s growth strategy.  

Yet fusion remains at the margins of Europe’s industrial policy, rather than at its center. There’s no time to waste. American and Chinese companies now talk about connecting pilot plants to the grid in the early 2030s.  

In contrast, Europe’s current roadmap looks cautious. It plans to launch its first demonstration plant in the 2040s, and large-scale commercial deployment will only come afterwards. That logic made sense when fusion was regarded as a long-term research project. It fits poorly with an industry revving up large-scale projects in the next decade. 

The irony is that Europe is a leader in fusion research. Its International Thermonuclear Experimental Reactor (ITER) in southern France has demonstrated a self-heating “burning plasma” — a critical milestone in which the fusion creates enough heat to sustain itself rather than relying on external energy input. The EU also runs some of the world’s most advanced fusion laboratories, with its Barcelona-based Fusion for Energy (F4E) managing more than 1,300 procurement contracts worth over €7 billion.  

But European governance remains divided. EUROfusion, the consortium coordinating EU-funded fusion research, manages research programs but cannot sign partnership contracts with industry. F4E manages international partnerships and industrial procurement, but it has no say over research projects. The overlapping structures limit direct support for private developers who aim to build fusion plants. 

Regulation adds an additional layer of uncertainty. For investors and utilities, the key question is simple: will fusion plants be licensed like nuclear fission reactors, or under a lighter framework closer to particle accelerators and industrial sources? The US and the UK have already separated fusion regulations from those regarding traditional, much more dangerous nuclear power. Japan is following suit. 

The EU has not. National governments, not Brussels, will license facilities. The EU’s nuclear Euratom agency — the treaty-based framework that sets rules for nuclear safety, radiation protection, and nuclear research across member states — should follow US leadership and separate fusion from fission. 

Financing represents another problem. Even though Europe hosts credible fusion companies, most of the roughly $8-10 billion in global private fusion funding has flowed to US firms. European capital markets are cautious. Where the US uses public money to anchor private investment, Europe’s fusion startups are left to navigate generic innovation schemes and national programs.  

The EU should refocus its research around commercializing, not just studying, fusion, according to the independent think tank the Clean Air Task Force. It should open its R&D programs to the private sector. It should coordinate major test facilities to pursue commercial projects. And it should treat fusion as a strategic green technology across EU law, making it eligible for the same industrial support deployed for batteries, hydrogen, and other clean-tech sectors.  

Unless Europe changes, many of its fusion leaders will likely build their first plants abroad, where capital, regulation, and industrial policy are supportive. Europe’s role risks narrowing to that of a high-end supplier: providing components, codes, and talent to a fusion industry headquartered elsewhere. 

The coming EU Fusion Strategy, due at the end of this year or early next year, must decide whether fusion will become another sector in which Europe provides the science while others build the industry, or whether the bloc is ready to bet big on a technology that could power its competitiveness. 

Dr. Anda Bologa is a senior researcher in the Tech Policy Program at the Center for European Policy Analysis (CEPA).   

Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.

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