Japan has raised concerns regarding accident liability exposure for the small modular reactor (SMR) projects it is funding in the United States, despite a senior U.S. official stating that Japan incurs no liability under the current structure. This issue is a sticking point in negotiations, with the U.S. pledging to resolve these concerns before agreements are finalized.
The broader initiative involves Japan investing up to $65 billion in U.S. SMR projects. This includes a previously announced commitment of up to $40 billion by GE Vernova Hitachi to build SMR power plants in Tennessee and Alabama. These SMRs, specifically the BWRX-300 model, are designed to generate about one-third the power of conventional commercial reactors and would be manufactured elsewhere before on-site assembly.
The partnership also aims to establish an SMR supply chain within the U.S. and facilitate the global export of this technology. This aligns with a larger U.S. nuclear agenda under the Trump administration, which includes fast-tracking small reactor approvals, a goal to build 10 large-scale reactors by 2030, and a target to quadruple U.S. nuclear generation capacity by 2050. The financing for these projects comes from Japan's $550 billion capital commitment made during previous tariff negotiations, with the SMR investment being part of the second round of projects announced, totaling $73 billion in that round.
Despite the significant investment and aspirations, industry experts express skepticism about the economic viability and deployment speed of these new reactor designs. Concerns include the massive price tag of initial BWRX-300 projects, with the first in Ontario estimated to cost over $20 billion for four 300-megawatt reactors. Analysts question whether utilities, investors, or foreign partners will shoulder the substantial risk, suggesting the federal government may need to provide much larger subsidies. Critics note that while GE Vernova-Hitachi anticipates cost reductions after initial builds, the nuclear industry has a history of underestimating expenses. Furthermore, even months after initial announcements, some industry insiders express doubt about actual investment flows, with one senior official stating, "Most of us have given up."
