Commodities January 21, 2026

US Energy Department to Propose Incentive Deals to States for Hosting Nuclear Waste Storage

Administration aims to resolve longstanding nuclear waste challenges to facilitate ambitious expansion of nuclear power capacity by 2050

By Avery Klein
US Energy Department to Propose Incentive Deals to States for Hosting Nuclear Waste Storage

The U.S. Department of Energy plans to invite U.S. states to express interest in agreements for hosting underground nuclear waste repositories. These agreements, expected to include incentives for constructing nuclear reactors, mark a significant policy departure from prior centralized storage plans. The initiative aligns with the administration's goal to increase nuclear power capacity to 400 gigawatts by 2050 amid rising electricity demand influenced by sectors such as AI and cryptocurrency data centers.

Key Points

  • U.S. Department of Energy will seek state interest in hosting nuclear waste storage facilities with linked incentives for nuclear reactor construction.
  • The administration targets expanding nuclear power capacity to 400 gigawatts by 2050 amid increasing electricity demand including from AI and cryptocurrency data centers.
  • The plan pivots away from Yucca Mountain as a centralized nuclear waste repository to a consent-based, multi-state storage approach with optional incentives for reprocessing and uranium enrichment.

The U.S. Department of Energy (DOE) is preparing to engage with individual states this week to gauge their willingness to host nuclear waste storage facilities. According to an informed source, the federal agency intends to offer states incentive packages linked to the development of new nuclear power plants as part of this proposal.

This policy move aims to address one of the most enduring challenges hindering the expansion of nuclear energy in the United States: the safe and acceptable storage of radioactive waste. The Trump administration has set an ambitious target to quadruple the nation’s nuclear power capacity, aiming to reach 400 gigawatts by 2050 in response to a renewed increase in electricity consumption—driven in part by growth in data centers handling artificial intelligence and cryptocurrency operations.

Resolving community and political resistance to nuclear waste storage installations is seen as pivotal in achieving these expansion goals. Commenting at the World Economic Forum in Davos, President Donald Trump highlighted that nuclear energy can be developed at reasonable costs while maintaining safety, a notable shift from his previous cautious stance on the technology.

The Department of Energy has not provided immediate commentary regarding the specifics of the plan, which could still undergo adjustments. Historically, local opposition related to the hazards of radioactive and toxic materials has impeded the advancement of nuclear power infrastructure. Presently, spent nuclear fuel remains stored onsite at reactor locations, initially in spent fuel pools and subsequently transferred to robust concrete and steel casks.

This emerging plan would represent a substantial change from the prior strategy focused on utilizing Yucca Mountain in Nevada as a single, centralized repository for all U.S. nuclear waste. Since 1987, the DOE had concentrated its efforts exclusively on developing Yucca Mountain for long-term waste storage. However, the project was halted under the Obama administration due to opposition from Nevada’s political leaders. Over the course of multiple administrations, approximately $15 billion was expended on the Yucca Mountain initiative.

Following the shelving of Yucca Mountain, the DOE shifted its approach towards a consent-based siting process for nuclear waste facilities, though no permanent site has been established to date. The current proposal will invite states to signal interest in composite agreements that encompass nuclear power plant construction alongside incentives pertaining to nuclear waste reprocessing and uranium enrichment technologies. Participation in these agreements will be non-binding, and states will have the discretion to accept only certain elements.

Reprocessing of nuclear waste, essentially recycling spent fuel, was previously authorized for development after former President Ronald Reagan lifted a moratorium on the practice. Nonetheless, commercial implementation within the U.S. has been limited due to high costs. The approach also faces criticism from non-proliferation advocates concerned about the potential risks of nuclear materials being diverted from the supply chain for unauthorized weaponization.

This latest plan was initially reported by another news outlet on Wednesday, coinciding with the broader federal initiative to rejuvenate the country’s nuclear energy landscape in response to evolving electricity demands.

Risks

  • Local opposition to nuclear waste storage sites could slow or complicate implementation, impacting nuclear power expansion efforts.
  • Uncertainty remains over the commercial viability and acceptance of nuclear waste reprocessing due to cost and non-proliferation concerns.
  • Potential changes in policy details could affect state participation and the overall feasibility of establishing permanent nuclear waste storage solutions.

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