The Department of Energy recently announced that certain advanced nuclear reactor projects can qualify for a categorical exclusion from the National Environmental Policy Act’s (NEPA) full review process. The move is a practical step forward to accelerate innovation, reduce unnecessary cost and delay, and strengthen U.S. competitiveness in nuclear energy. 

What is NEPA? 

NEPA is a procedural law that requires federal agencies to conduct environmental reviews for projects such as highways, energy development, federally funded projects, and activities on federal land. The NEPA process begins when a federal agency proposes a major action that could significantly affect the environment. If the environmental impact is unknown and not excluded from consideration under the law, the agency will conduct an Environmental Assessment to determine whether the proposed action will have a significant effect on the environment.  f it does not, the agency issues a Finding of No Significant Impact (FONSI). If the agency knows or determines that there will be significant environmental effects, it must prepare a more comprehensive Environmental Impact Statement (EIS). 

In other instances, projects may be eligible for a “Categorical Exclusion” (CE) to allow the project to proceed with minimal paperwork. Agencies may apply a CE when a project’s conditions fit within pre-defined governmental exceptions to NEPA, such as having a small footprint. CEs do not require an EA or EIS, although even CEs can take months or as long as a year, particularly if agencies must consult with other agencies and conduct a public notice and comment period. Agencies can rely on existing NEPA documentation and historical assessments for CEs, and Congress has directed agencies to establish CEs. There are also instances where CEs have been established in statute.

Over time, NEPA has become a serious drag on investment, innovation, and the economy. The NEPA process has burgeoned into a regime that often delays critical infrastructure and energy projects for years or even decades, with onerous reviews that add cost without meaningfully improving environmental outcomes. More comprehensive reviews and excessive litigation add years to projects coming online, can stall them indefinitely, or kill them altogether. In fact, the mere threat of litigation lengthens timelines because risk-averse agencies want to guard against lawsuits.

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DOE takes action

In response to Executive Order 14301, “Reforming Nuclear Reactor Testing at the Department of Energy,” DOE has updated its NEPA implementing procedures and published a rule establishing a categorical exclusion for advanced nuclear reactors. Under this rule, certain advanced reactor projects may be exempted — on a case-by-case basis — from the preparation of lengthy EAs or EIS, provided the project’s characteristics demonstrate that it “will not have a significant effect on the human environment.”

Expanding the use of categorical exclusions for advanced reactors is a policy change C3 Solutions has long advocated for. The United States is at a critical inflection point in nuclear innovation. Nuclear has support from the administration and multiple layers of public financing, including loan guarantees and tax credits. But what is truly necessary to usher in an era of low-cost nuclear power is regulatory modernization. Risk-informed, performance-based reviews will maintain rigorous environmental and public safety safeguards while minimizing unnecessary cost and delay. 

Advanced reactors, including small modular reactors (SMRs), microreactors, and Generation IV designs, promise enhanced safety, lower waste profiles, and more flexible, scalable power output. These are all attributes that make them ideal for both traditional dispatchable power and for hyperscalers looking for clean, dependable power. But regulatory uncertainty and overly prescriptive requirements have been two of the biggest obstacles to turning reactor designs into commercial realities. These bottlenecks increase project risk, raise capital costs, and delay deployment of advanced energy technologies. DOE’s NEPA categorical exclusion is one important step in the right direction. 

Nuclear must make economic sense for it to be competitive 

For nuclear to play a larger role in America’s energy portfolio, it must be economically viable. Reforming government-imposed barriers that artificially inflate nuclear power costs is fundamental to making that happen. 

>>>READ: Reforming Radiation Standards to Unlock Nuclear Energy’s Full Potential

Regulatory modernization will strengthen U.S. competitiveness. Other nations, particularly China and Russia, are aggressively advancing advanced nuclear technologies through funding and the construction of reactors worldwide. America has cutting-edge nuclear companies and hosts one of the most advanced research ecosystems in the world. Public policy should help de-risk, commercialize, and deploy reactors to meet America’s energy needs. DOE’s categorical exclusion for advanced reactors is another step in reversing the trend of bureaucratic inertia. 

In a world where energy systems are rapidly evolving, regulatory processes must evolve too. DOE’s categorical exclusion for advanced reactors is a sensible, evidence-based reform that will help unleash innovation, improve efficiency, and lower costs — all while preserving environmental protection. U.S. energy policy should continue to champion reforms that let technology flourish without procedural paralysis, and DOE’s move is an important step in that direction.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.