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As countries around the globe look for new clean power sources, and as artificial intelligence (AI) drives up electricity demand, the fusion industry is working to turn a decades-long scientific goal into a commercial energy source.

By definition, nuclear fusion happens when two light atomic nuclei combine to form a single heavier one while releasing massive amounts of energy. Fusion reactions take place in a state of matter called plasma, which is a hot, charged gas made of positive ions and free-moving electrons with unique properties distinct from solids, liquids or gases.

In simpler terms, fusion is the process that powers the sun. Scientists are working to recreate this on Earth by forcing atoms together under extreme conditions, which releases a large amount of energy. Fusion could become a viable source of clean power if the technology reaches commercial scale, but it’ll also need a supply chain that can make the specialized components, materials and systems behind it.

“Ever since the theory of nuclear fusion was understood in the 1930s, scientists and increasingly also engineers have been on a quest to recreate and harness it,” the International Atomic Energy Agency (IAEA) explains, noting that fusion could generate four times more energy per kilogram of fuel than fission (used in nuclear power plants) and nearly four million times more energy than burning oil or coal.

Fusion’s Biggest Selling Points

As an environmentally friendly energy source, fusion is of major interest for governments, researchers and energy companies looking for a long-term source of power that doesn’t emit carbon dioxide during operation. ITER (International Thermonuclear Experimental Reactor) says fusion’s advantages include:

• No CO₂. Fusion doesn't emit harmful substances like carbon dioxide or other greenhouse gases into the atmosphere. Its major byproduct is helium, an inert, non-toxic gas. 
  
  
• No long-lived radioactive waste. Nuclear fusion reactors produce no high activity, long-lived nuclear waste. “The activation of components in a fusion reactor is anticipated to be low enough for the materials to be recycled or reused within 100 years,” it says, “depending on the materials used in the ‘first-wall’ facing the plasma.” 
  
  
• Limited proliferation risk. Fusion doesn't employ fissile materials like uranium and plutonium. (Radioactive tritium is neither a fissile nor a fissionable material.) There are no enriched materials in a fusion reactor like ITER that could be exploited to make nuclear weapons. 
  
  
• No meltdown risk. The quantity of fuel present in the vessel at any one time is enough for a few seconds only and there is no risk of a chain reaction. 
  
  
• Lower cost over time. The power output of the kind of fusion reactor would be similar to that of a fission reactor. “The average cost per kilowatt of electricity cannot yet be extrapolated, however, as this would require the operational experience which will only be available after ITER has been operated for some years,” ITER explains. “As with many new technologies, costs will be more expensive at first, when the technology is new, and gradually less expensive as economies of scale bring the costs down.” 

The Future Looks Bright

According to FIA’s 2026: The Fusion Industry Supply Chain report, supply chain spending by the fusion industry increased by 24% in 2025. The private fusion companies that share their supply chain spending data spent $538 million, and that’s expected to increase to $681 million this year (a 27% increase).

“Our fourth annual report sees considerable progress in the relationship between fusion developers and their supply chain. We see signs of the “chicken and egg” gridlock raised in previous reports easing, as supplier relationships improve and new and existing suppliers invest in scaling up capacity to meet the sector’s growing needs,” says FIA CEO Andrew Holland, in a press release. “Nonetheless, we are still in the engineering phase of the challenge, and while there is much to be optimistic about, demands on the supply chain will expand to serve commercial fusion machines.

” Marc Lachaise, director at Fusion for Energy, is bullish on the future of nuclear fusion as a clean energy source, and says it’s currently moving from long-term promise to an emerging industrial reality. “The supply chain will be a decisive factor in scaling it,” he adds. “In Europe, the ecosystem developed through ITER over the past two decades has created an unparalleled base of industrial expertise, innovation, and skills. Building on this foundation will be essential to accelerate the transition from large-scale experiments to future fusion power plants.”