1. Introduction

Small Modular Reactors (SMRs) are advanced nuclear reactors generally designed with smaller electrical capacity than conventional large nuclear power plants and with modular, factory-oriented construction. Their regulatory attraction is also their principal legal difficulty: the technology is new, but nuclear regulation is built around long-established assumptions concerning reactor size, site, emergency planning, staffing, security, environmental impacts and licensing procedures.

The International Atomic Energy Agency (IAEA) has specifically identified the need for regulators to examine how existing regulatory approaches should address SMRs and to promote cooperation among national regulators. (Nucleus)

The central regulatory question is therefore:

How can regulators maintain the same fundamental level of nuclear safety while avoiding regulatory requirements designed for large conventional reactors that may not correspond to the risk profile or physical design of an SMR?

2. Major Regulatory Challenges

A. Applicability of Existing Nuclear Licensing Frameworks

Most nuclear regulatory systems were developed around conventional large reactors. SMRs may differ substantially in:

reactor size;

containment design;

passive safety systems;

fuel configuration;

staffing;

cooling systems;

emergency planning;

modular construction;

factory fabrication;

number of modules at a site.

Consequently, applying conventional licensing requirements mechanically can produce unnecessary regulatory complexity.

The U.S. Nuclear Regulatory Commission (NRC), for example, expressly recognized that its traditional regulatory framework evolved primarily around light-water reactors and that prescriptive provisions may not readily fit innovative reactor technologies. (Nuclear Regulatory Commission)

The NRC has therefore developed technology-inclusive, risk-informed and performance-based approaches for advanced reactors. (Nuclear Regulatory Commission)

3. Risk-Informed and Technology-Neutral Regulation

A major challenge is determining how much regulation is appropriate for a particular SMR.

A conventional regulatory system may regulate according to the technology used. A modern approach instead asks:

What hazards does the reactor present?

What safety functions are required?

What systems are important to safety?

What is the probability and consequence of accidents?

What defence-in-depth is necessary?

The NRC's advanced-reactor framework emphasizes risk-informed, performance-based and technology-inclusive regulation. (Nuclear Regulatory Commission)

This is important because an SMR may achieve safety through fundamentally different engineering arrangements from a conventional reactor.

Legal difficulty

Regulators must avoid two opposite problems:

under-regulation, because the technology is considered inherently safe; and

over-regulation, where requirements designed for conventional reactors are imposed without considering the SMR's actual risk profile.

The appropriate legal model is therefore generally a graded regulatory approach.

4. Site Licensing

SMRs create new questions concerning where nuclear reactors may legally be located.

Some SMR concepts are intended for:

remote communities;

industrial facilities;

mining operations;

desalination;

district heating;

hydrogen production;

replacement of fossil-fuel generation.

This potentially expands the number and type of locations at which nuclear facilities could be proposed.

The regulatory authority must therefore examine:

population distribution;

seismic conditions;

flooding;

cooling-water availability;

geological characteristics;

transportation;

emergency response;

security;

proximity to industrial facilities;

environmental impacts.

In India, AERB's licensing process already requires a specific siting consent, including assessment of site suitability, plant-site interaction and emergency-action feasibility. (AERB)

For SMRs, the difficulty is determining whether conventional exclusion zones and site criteria remain appropriate for every design.

5. Emergency Planning Zones

This is one of the most important SMR-specific regulatory questions.

Traditional nuclear plants generally require substantial emergency preparedness because of the potential consequences of a severe accident.

Some SMR designs claim that:

their smaller inventories;

underground containment;

passive cooling;

lower source terms; and

reduced accident consequences

may justify different emergency-planning requirements.

But regulators cannot simply assume that a smaller reactor automatically creates proportionately smaller off-site consequences.

A legal framework must establish objective criteria based upon:

accident source term;

release pathways;

radioactive inventory;

containment performance;

accident progression;

population exposure;

uncertainty.

Thus, emergency planning should be risk-based rather than merely capacity-based.

6. Multi-Module Licensing

A distinctive SMR issue is the possibility of installing multiple reactor modules at one site.

For example, one facility might contain:

Module 1 + Module 2 + Module 3 + … + Module 12.

This creates difficult questions concerning whether regulators should treat:

each module as a separate reactor;

the entire facility as one nuclear installation; or

the modules plus shared systems as an integrated plant.

The legal significance is considerable because multiple modules may share:

control rooms;

cooling systems;

electrical systems;

security infrastructure;

radioactive-waste facilities;

emergency systems;

support buildings.

A failure in a shared system could potentially affect multiple modules.

Therefore, licensing must examine both individual-module safety and common-cause/common-mode risks.

7. Factory Manufacturing and Standardized Designs

One of the principal economic arguments for SMRs is that modules can be manufactured in factories and transported to sites.

This changes the traditional nuclear regulatory model.

Instead of regulating only:

site → construction → commissioning → operation,

regulators may need to regulate:

factory → component manufacturing → quality assurance → transportation → site assembly → commissioning → operation.

This raises questions concerning:

manufacturing licences;

supplier qualification;

quality assurance;

nuclear-grade components;

inspection of factories;

regulator access to manufacturing facilities;

international supply chains;

design changes during serial production.

The NRC has specifically considered manufacturing-license issues for future reactors, noting increased interest in manufacturing licences in the advanced-reactor context. (Nuclear Regulatory Commission)

8. Design Certification and Standardization

SMRs depend heavily on standardized designs.

If one regulator approves an SMR design, developers may want to construct many identical units.

The regulatory challenge is balancing:

standardization
with
site-specific safety assessment.

A design may be standardized, but its actual risk can depend upon:

geology;

climate;

seismicity;

cooling arrangements;

surrounding population;

grid characteristics;

security environment.

The U.S. NuScale experience demonstrates the complexity of this process. NRC reviewed the NuScale design through a design-certification process and subsequently reviewed the US460 Standard Design Approval. The NRC issued the US460 Standard Design Approval in May 2025. (Nuclear Regulatory Commission)

This illustrates that even a standardized SMR requires extensive regulatory examination and documentation.

9. Environmental Impact Assessment

SMRs remain nuclear installations and therefore raise environmental questions concerning:

radioactive releases;

radioactive waste;

spent fuel;

water consumption;

thermal effects;

land use;

construction impacts;

biodiversity;

transportation.

The fact that an SMR is smaller does not eliminate these legal obligations.

Indian nuclear projects illustrate the importance of environmental review. In G. Sundarrajan v. Union of India (2013), the Supreme Court considered challenges concerning environmental and safety issues associated with the Kudankulam Nuclear Power Project. The case demonstrates the importance of regulatory compliance, environmental assessment and public-safety considerations in nuclear projects. (Indian Kanoon)

Similarly, P. Sundaravathanam v. Union of India (2022) involved challenges concerning environmental impact assessment, cumulative impacts, public access to environmental information and siting issues relating to a thermal/nuclear-related industrial context. (Indian Kanoon)

The lesson for SMRs is that smaller physical size does not automatically remove environmental-law obligations.

10. Radioactive Waste and Spent Fuel

Another major regulatory challenge concerns the back end of the nuclear fuel cycle.

SMRs will still generate:

spent nuclear fuel;

radioactive operational waste;

contaminated materials;

decommissioning waste.

Some SMR designs may have different fuel cycles or longer refuelling intervals, but these features do not eliminate the legal need for:

storage;

transportation;

treatment;

disposal;

long-term institutional responsibility.

In India, radioactive waste management is governed within the atomic-energy regulatory framework, including the Atomic Energy (Safe Disposal of Radioactive Wastes) Rules, 1987. (AERB)

11. Decommissioning

SMR economics may depend on serial deployment of numerous relatively small units.

This creates a potential future problem:

Who is legally responsible for decommissioning hundreds of individual modules?

Regulation must therefore establish:

decommissioning funds;

financial guarantees;

dismantling obligations;

radioactive-waste responsibilities;

site restoration;

long-term monitoring.

Indian AERB licensing explicitly extends to decommissioning, with regulatory consent required for the decommissioning stage. (AERB)

12. Nuclear Liability

Nuclear accidents can generate enormous potential liabilities.

SMRs therefore raise questions about:

operator liability;

supplier liability;

compensation limits;

insurance;

government indemnification;

cross-border damage;

transportation accidents.

This is particularly important for factory-produced modules because responsibility may be distributed among:

designer → manufacturer → transporter → operator → site owner.

India has a specific Civil Liability for Nuclear Damage Act, 2010, alongside the Atomic Energy Act framework. (AERB)

A future SMR regime must clearly determine how liability rules apply to modular manufacturing and supply chains.

13. Nuclear Security and Cybersecurity

SMRs may introduce a different security profile because they can be:

smaller;

remotely located;

digitally controlled;

highly automated;

factory manufactured.

Consequently, regulators must consider:

physical protection;

cyberattacks;

insider threats;

remote operation;

digital instrumentation and control;

supply-chain cybersecurity;

protection of nuclear material.

The NRC's advanced-reactor regulatory modernization work specifically addresses physical-security requirements in a technology-inclusive manner. (Nuclear Regulatory Commission)

14. Staffing and Human Factors

Traditional reactors may require large numbers of highly trained personnel.

SMRs often propose:

smaller operating crews;

greater automation;

centralized control;

remote monitoring.

This creates regulatory questions concerning:

minimum staffing;

operator licensing;

remote operation;

human-machine interaction;

automation failure;

operator fatigue;

training requirements.

The regulator must establish whether staffing reductions are justified by evidence rather than merely by the manufacturer's design assumptions.

15. Grid Integration

SMRs may be used differently from conventional nuclear plants.

They may potentially provide:

baseload generation;

flexible generation;

industrial heat;

hydrogen production;

district heating;

microgrid services.

Consequently, nuclear regulators increasingly interact with electricity-market and grid regulators.

Questions include:

frequency response;

load following;

island operation;

black-start capability;

grid disconnection;

cybersecurity;

interaction with renewable generation.

The NRC's advanced-reactor framework expressly contemplates flexible operational characteristics such as load following subject to appropriate measures. (Nuclear Regulatory Commission)

16. Public Participation and Regulatory Legitimacy

Nuclear projects frequently generate public opposition or support concerning:

safety;

environmental impacts;

radioactive waste;

emergency preparedness;

land acquisition;

public health.

SMRs should not be treated as automatically exempt from meaningful public participation.

The NRC expressly describes public involvement and transparency as important aspects of nuclear regulatory processes. (Nuclear Regulatory Commission)

A regulatory system that accelerates SMR deployment by reducing transparency could face legal challenges concerning procedural fairness and environmental decision-making.

17. Important Case Laws

17.1 Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978)

This is one of the most important U.S. nuclear regulatory cases.

The U.S. Supreme Court held that courts generally should not impose additional procedural requirements on expert agencies beyond those required by statute.

At the same time, the case recognized that nuclear licensing involves environmental considerations, including the fuel cycle and radioactive waste. (Legal Information Institute)

Relevance to SMRs

The case supports an important principle:

SMR regulation should be based on the statutory mandate and technically justified regulatory procedures, rather than courts or agencies arbitrarily creating additional procedural layers.

17.2 Baltimore Gas & Electric Co. v. NRDC, 462 U.S. 87 (1983)

The Supreme Court considered the NRC's treatment of the environmental effects of the nuclear fuel cycle.

The Court recognized the value of generic regulatory determinations where issues are common across nuclear facilities, while requiring the agency's conclusions to have an adequate legal and evidentiary basis. (Legal Information Institute)

Relevance to SMRs

This is particularly relevant to standardized SMR designs.

If a particular environmental or safety issue is common to an entire class of SMRs, regulators may develop generic findings or standardized requirements, rather than repeating identical analysis for every unit.

17.3 Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Commission, 461 U.S. 190 (1983)

The Supreme Court examined the division between federal and state authority in nuclear regulation.

The decision recognized strong federal authority over nuclear safety while preserving certain state roles outside the federally pre-empted safety field. (Legal Information Institute)

Relevance to SMRs

This becomes important when SMRs are deployed across multiple jurisdictions.

A future SMR regulatory system must clarify the boundaries between:

national nuclear safety regulation;

state/provincial regulation;

electricity regulation;

land-use regulation;

environmental regulation.

17.4 Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984)

The Supreme Court examined federal pre-emption in the nuclear field and held that federal nuclear regulation did not necessarily pre-empt state-law remedies for certain conduct.

(Legal Information Institute)

Relevance to SMRs

The case demonstrates that nuclear safety regulation and other forms of legal accountability can coexist, depending on the precise legal issue.

For SMRs, this could become relevant to:

worker claims;

tort liability;

state environmental law;

compensation mechanisms.

17.5 G. Sundarrajan v. Union of India (2013) — India

The Supreme Court dealt extensively with challenges concerning the Kudankulam nuclear project, including environmental and safety concerns. The judgment illustrates judicial scrutiny of nuclear projects while recognizing the importance of expert regulatory institutions and safety procedures. (Indian Kanoon)

Relevance to SMRs

Indian SMR deployment will similarly have to satisfy:

environmental requirements;

safety requirements;

regulatory approvals;

public-interest considerations.

18. Indian Regulatory Framework for SMRs

India's existing nuclear regulatory structure is principally based on the Atomic Energy Act, 1962, supplemented by environmental legislation and nuclear-specific rules.

AERB identifies the Atomic Energy Act, Environmental Protection Act, Civil Liability for Nuclear Damage Act and radioactive-waste regulations among the principal legal instruments relevant to nuclear regulation. (AERB)

AERB's current nuclear-facility licensing model involves successive consents for:

Siting

Construction

Commissioning

Operation

Decommissioning

and applies a graded approach based on the hazards associated with the facility or activity. (AERB)

This provides a foundation for SMR regulation, but specific SMR deployment may require additional design-specific regulatory guidance because many SMR technologies differ from India's historically dominant reactor designs.

19. Regulatory Inspections

SMRs cannot rely solely on approval at the design stage.

Continuous regulatory oversight remains necessary.

AERB conducts routine, special and unannounced inspections, examining technical and administrative compliance, safety systems, emergency preparedness, radioactive-waste management and environmental surveillance. (AERB)

For SMRs, inspection may also have to extend to:

manufacturing plants;

component suppliers;

module assembly;

digital control systems;

software;

transportation;

multi-module interfaces.

This is a major departure from a purely site-centric regulatory model.

20. The Core Legal Problem

The fundamental regulatory challenge can be expressed as follows:

Conventional nuclear regulation

Large reactor → large site → site-based construction → conventional emergency planning → conventional staffing

SMR regulatory reality

Standardized design → factory manufacturing → modular transport → multiple units → passive safety → digital control → potentially smaller staffing → potentially different emergency consequences.

Therefore, simply reducing existing regulatory requirements is not sufficient.

The better approach is to create a framework based on:

Risk + Performance + Technology Neutrality + Defence in Depth + Transparency.

21. Suggested SMR Regulatory Framework

A comprehensive SMR regulatory regime should contain:

22. Conclusion

The principal regulatory challenge of Small Modular Reactors is not simply whether existing nuclear law permits smaller reactors. The deeper issue is whether traditional regulatory institutions can adapt to a fundamentally different nuclear deployment model.

SMRs challenge conventional assumptions concerning licensing, emergency planning, site selection, staffing, manufacturing, environmental assessment, multi-module operation, cybersecurity, liability, radioactive waste and decommissioning.

The U.S. experience with NuScale illustrates how advanced designs can require extensive design-specific regulatory analysis, while the NRC's development of technology-inclusive and risk-informed approaches demonstrates the movement toward regulatory modernization. (Nuclear Regulatory Commission)

In India, the existing AERB framework already provides staged nuclear licensing and a graded approach to regulation, but widespread SMR deployment would require careful consideration of how those mechanisms apply to standardized, modular and potentially multi-site reactor technologies. (AERB)

The central principle should therefore be:

SMRs should not receive weaker nuclear regulation merely because they are small; rather, they require regulation that is proportionate to their demonstrated risks, technically neutral, transparent, and capable of addressing the entire life cycle of modular nuclear facilities.

The case law from Vermont Yankee, Baltimore Gas & Electric, Pacific Gas & Electric, Silkwood, and G. Sundarrajan provides useful legal principles concerning administrative procedure, environmental review, federal/state regulatory boundaries, liability and judicial review that can guide the development of this emerging SMR regulatory framework. (Legal Information Institute)