Deep Dive into the 2026 Tax Revision: SMR Designation as a National Strategic Technology and Energy Ecosystem Outlook
Through the 2026 tax revision, SMRs have been designated as a national strategic technology, confirming large-scale tax credits for R&D and facility investments. With the government's policy support and the upcoming SMR Special Act in September, a long-term growth foundation for the related ecosystem has been established.
The Significance of SMR as a National Strategic Technology
The core of the tax revision plan announced by the government in August 2026 is the inclusion of Small Modular Reactor (SMR) and Micro Modular Reactor (MMR) technologies as national strategic technologies. The scope of 'future energy', previously centered on the hydrogen economy, has been officially expanded to include next-generation nuclear power technologies. This indicates a clear policy direction to utilize SMRs as the baseload power source for artificial intelligence (AI) data centers and semiconductor clusters.
Specific Scale and Ripple Effects of Tax Benefits
Following the designation as a national strategic technology, the SMR industry will receive significantly higher tax credits compared to standard technologies.
- R&D Tax Credits: A deduction rate of up to 30-50% will be applied, mitigating the financial risks associated with reactor design and safety technology advancement.
- Facility Investment Tax Credits: A deduction of up to 15-30% will be provided, acting as a direct incentive for expanding infrastructure such as modular manufacturing processes and digital instrumentation and control (MMIS) facilities.
These tax supports will lower the initial barriers to entry in the capital-intensive nuclear industry and function as a key mechanism to attract private capital investment.
Domestic SMR Value Chain and Key Players
As the industry ecosystem materializes, a comprehensive value chain ranging from design engineering to equipment manufacturing is being formed.
Design and Source Technologies
KEPCO E&C is focusing on securing source technologies by leading the design and engineering of next-generation reactors, including the i-SMR. Furthermore, Woori Technology is proving stability in the control sector of SMRs based on its capabilities in nuclear power plant control systems (MMIS).
Equipment and Foundries
Doosan Enerbility, as the dominant manufacturer of main equipment for domestic nuclear power plants, is expected to play a pivotal role as an SMR manufacturing foundry. In addition, specialized equipment companies such as BHI and Iljin Power will be integrated into the supply ecosystem, contributing to industrial expansion.
Market Outlook and the September SMR Special Act
The 'Special Act on the Promotion and Support of SMR Development' is scheduled to take effect in September 2026. This provides institutional backing for regulatory exemptions for demonstration projects and the establishment of industrialization platforms. The year 2026 marks a turning point where SMRs transition from mere expectations to the stage of commercial performance verification. With tax benefits and legal foundations in place, the market is expected to realign around companies that secure clear order volumes and technological competitiveness.