By Jordy Benooit
Introduction
The tension around Iran and the Strait of Hormuz, the phase out of Russian energy imports, and the subsequently rising energy prices highlight a structural weakness in the European Union’s energy system: a supply chain subjected to continued exposure to external shocks. When geopolitical disruption affects major oil and gas routes, the impact is felt in Europe almost immediately through higher import costs, price volatility and renewed pressure on industrial competitiveness. This reflects the extent to which European energy security still depends on supply chains and transit routes beyond the Union’s control, making Europe highly exposed.
SMRs Enter the Mix
Europe cannot reduce import dependence without rapidly expanding renewables. Wind and solar must remain central, supported by storage, demand-side response and stronger interconnection. But even a decarbonised power system needs constant clean capacity to cover low renewable output, winter peaks and continuous industrial power and heat. The next question is what provides that stable, low-carbon backbone when variable generation is insufficient.
This is where small modular reactors (SMRs) enter the debate: a new generation of nuclear technologies designed to support the Union’s climate, competitiveness and security objectives. On 10 March 2026, the Commission adopted its SMR strategy, COM(2026) 117, with the stated objective of accelerating development and deployment in Europe and bringing the first projects online in the early 2030s. The Commission frames SMRs not only as reliable, homegrown clean electricity, but as an industrial asset for European supply chains, data centres and resilience.
We Need Reliability in the Shade
The case for SMRs is not that they can replace renewables, nor that they offer a shortcut through the energy transition. In a power system increasingly dependent on variable generation, SMRs can provide continuous low-carbon output, support adequacy and supply industrial heat, hydrogen production and other high-demand users. The emerging policy case is not old-style centralised baseload, but a stable, low-carbon backbone within a more flexible and diversified energy system. The debate is moving from whether that need exists to whether the EU can create the regulatory, industrial and financial conditions for SMRs to help meet it.
The Commission’s 2026 strategy treats SMRs as a shared European industrial project, rather than a series of isolated national initiatives. The logic is straightforward. A fragmented approach means duplicated licensing processes, slower approvals, weaker manufacturing visibility, and higher unit costs for first projects. A coordinated EU approach can instead concentrate demand around fewer designs, support common safety assessments and joint early reviews, and create a fleet model that gives investors and regulators more certainty. The same strategy also links deployment to supply-chain development, skills, research support, and targeted finance, precisely because the challenge is as much industrial and regulatory as it is technological.
A Clean Industrial Acceleration
The decarbonisation case extends beyond power generation. The Commission sees SMRs’ strongest value in hybrid, off-grid and heat applications, particularly in hard-to-abate sectors where electrification alone may be insufficient or costly. It points to chemicals, steel, refineries, maritime transport, defence, district heating, data centres, hydrogen, synthetic fuels and desalination.
SMRs are therefore being positioned not as another clean electricity source, but as strategic, continuous low-carbon energy and heat for industrial clusters and urban systems still dependent on fossil fuels. As the Commission links industrial electrification with energy resilience, SMRs are becoming part of the EU’s competitiveness and industrial-policy agenda.
The Gaps Between Instrument and Objective
The EU now has a strategic framework for SMRs, but not yet a fully credible delivery framework. The clearest gap is financing. The Commission’s strategy identifies a number of instruments that could support deployment, including InvestEU guarantees, the Innovation Fund, a future IPCEI on innovative nuclear technologies, Net-Zero Industry Act, SMR Valleys, and a possible temporary InvestEU top-up of EUR 200 million until 2028 for initial commercial units. That is a meaningful step forward, but it remains focused on enabling architecture, rather than investable certainty.
None of these tools provide a firm, committed financing package capable of sustaining first-of-a-kind projects from development, through licensing, to construction. If the EU is serious about early-2030s deployment, it will need to move beyond signalling and assemble a genuine first-project financing framework, combining de-risking support, clearer public backing, and stronger visibility for private investors and industrial off-takers.
Licensing is the second test of credibility. Here too, the Commission has identified the right direction: stronger cooperation through ENSREG, joint early reviews, regulatory sandboxes, and an ‘SMR coalition’ of Member States willing to align licensing or mutually recognise parts of each other’s decisions. But Europe still needs convergence around fewer designs and a genuine fleet approach, so a reactor licensed in one participating market does not face a wholly separate process in the next.
The next phase should be about turning shared priorities into concrete action. A credible EU framework will not be judged by the number of instruments it can list, but by whether it can bring the first units to final investment decision and into operation on a realistic timetable.
Arguing Strategic Paralysis
Critics of SMRs raise legitimate concerns. The first is economic: first-of-a-kind projects are inherently high-risk, and Europe does not yet have a financing framework that fully resolves that problem. The second is regulatory: unless licensing convergence moves from objective to practice, deployment will remain slow and fragmented. The third is strategic: some argue that an excessive focus on SMRs could divert political attention and capital away from renewables, grids, storage and demand-side flexibility, which remain indispensable to the transition.
Those objections should be taken seriously, but they are not valid arguments for excluding SMRs from Europe’s energy strategy. They are an argument for a more disciplined policy framework. Renewables must remain the main focus of the energy transition, yes, but a decarbonised system will still require reliable clean capacity where these fall short. If Europe is serious about energy security, decarbonisation and industrial resilience, it cannot afford to leave the issue of reliable clean capacity unresolved.
Conclusion
Europe should not treat SMRs as a distraction from the energy transition, but as a test of whether it can build the full clean-energy system it claims to need. Renewables, grids, storage and demand-side flexibility must remain the foundation, but constant low-carbon capacity will also be needed to reduce import dependency, support competitiveness and strengthen resilience. The Commission has opened the door. Now the EU, Member States, and industry must move from strategy to delivery: align licensing, support viable designs, create a bankable first-project financing model, and build the supply chains for deployment.
Are we prepared to develop an additional option that could strengthen the EU’s energy security, industrial decarbonisation and long-term resilience, or do we let strategic caution become strategic paralysis?
About the author
Jordy Benooit holds a B.Sc in Political Science and M.Sc in EU-Studies from Ghent University, and a Postgraduate specialisation in EU Policy Making from the BSoG. He is active in EU Public Affairs, while pursuing an LL.M. International and European Law. Most importantly, he is the proud godfather of two wonderful boys.
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