COUNCIL OF
THE EUROPEAN UNION

Brussels, 30 April 2003

8657/03

RECH 68
ATO 82
COVER NOTE
from:
Date of receipt :To:
Subject:

Secretary-General of the European Commission,
signed by Mrs Patricia BUGNOT, Director
29 April 2003
Mr Javier SOLANA, Secretary-General/High Representative
Communication from the Commission to the Council-State of progress of the negotiations concerning the ITER international nuclear
fusion energy research project

Delegations will find attached Commission document COM(2003) 215 final.

________________________

Encl.: COM(2003) 215 final

8657/03

DGE/kdv
DG C II

1ENCOMMISSION OF THE EUROPEAN COMMUNITIESBrussels, 28.04.2003
COM(2003) 215 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
State of progress of the negotiations concerning the ITER international nuclear fusionenergy research project

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL
State of progress of the negotiations concerning the ITER international nuclear fusionenergy research projectPreambleThis communication summarises the state of the negotiations conducted by the Commission
on behalf of the European Union concerning the ITER nuclear fusion energy research
project.
These negotiations reached a significant point in February 2003 with the accession of thePeople's Republic of China and the United States of America. In detailing the state ofnegotiations, this communication presents among other things the fundamental questions of
choice of site and cost sharing between the parties. A modified reference for EU financial
participation is proposed.
Whereas, in order to help provide the means for sustainable growth, it is in the interest of the
EU to consolidate the position of excellence that it has acquired in fusion research, theCommission underlines,
the importance of siting ITER in Europe;
the importance, in consequence, of the Union taking actions to maximise its chances toachieve this.
Finally, the Commission hereby announces to the Council its intention to present by the endof 2003 proposals for decisions concerning the international and European organisations
which would be responsible for ITER implementation and EU participation in the project
respectively.
1.

INTRODUCTION SUMMARY ON FUSION ENERGY AND ITER

There are three energy sources which, as an alternative to fossil fuels, contribute to or arecapable of contributing to society's energy supplies without significant greenhouse gas
emissions: renewable energy sources, nuclear fission energy and nuclear fusion energy.
Fusion, which is the source of the energy radiated by the sun and other stars, is by far themost widespread in the universe but the least developed on earth of these three non fossil
energy sources. However, because of its potential in terms of environmental benefits, safetyof operation and availability of fuel, fusion energy is the subject of research in mostindustrialised and the major developing countries.
Nuclear fusion is an important area of Community energy research and was in some ways aprecursor of the European Research Area. The integration of all European fusion activities,
which has been a feature of Community programmes for 30 years, has contributed a great deal
to the international position of excellence that European research has acquired in this area.

2

An key element of this excellence has been the success of the JET (Joint European Torus)
project, constructed and used for some twenty years at Community level. Although JET
remains a powerful research tool, it has achieved all the objectives for which it was designed.
Taking research beyond JET requires an even more powerful experimental facility, ITER, thesize of which will approach that planned for a future industrial reactor.
With the aim of sharing skills and reducing each party's financial input, the European Union,
with which Canada was associated, Japan, the Russian Federation and the USA carried out
detailed studies on ITER during the 1990s under an international agreement. The USA cut
back its fusion research after 1996 and ceased its ITER collaboration in 1998. The otherpartners re-scaled the project between 1998 and 2001 in order to reduce its cost and takeadvantage of the scientific and technical advances achieved in the interim.
The objectives of ITER are both scientific and technological. It will have to demonstrate thescientific and technical feasibility of fusion energy for peaceful purposes. To do this, ITER
will have to create, study and control a particular state of matter, plasma, which will produce
a fusion power of some 500 million watts during extended duration and then continuous
discharges. For the first time in the world, this power will greatly exceed, by a factor of ten,the power applied to the plasma. ITER will also have to test components and technologies
which are vital to a future industrial reactor and demonstrate their integration in one unit.
The timetable for and costs of ITER implementation were set out in detail in Commission
staff working paper SEC(2002)276 of 7 March 2002:–

ITER implementation will include a construction phase lasting about ten years, anoperation phase lasting about 20 years and a decommissioning phase,–the total cost of the construction phase is estimated at €4 570 million, at 2000 values.
The total cost of the project, covering the three phases mentioned above andincluding funds for decommissioning, is estimated at €10 300 million.

2.

CURRENT NEGOTIATIONS (SEE ALSO ANNEX)

International negotiations on ITER between the EU, represented by the European
Commission, Canada, Japan and Russia began in 2001. The directives adopted by the Councilof the European Union on 6 November 2000 limited the scope of these negotiations to thedevelopment of a legal framework for possible implementation of the ITER project.
The directives were amended by Council Decision of 27 May 2002, which allows theCommission to transmit to the other parties offers of potential candidate sites proposed by
Member States and to negotiate financing and cost sharing arrangements in conjunction withsite offers.
The negotiations have made satisfactory progress. The annex to the communication details thecourse of the negotiations and the results obtained so far. Agreement has been reached on thelegal status of the entitywhich would be responsible for ITER implementation. However,fundamental points have still to be discussed, such as choice of site, sharing between theparties of the costs of and responsibilities for supplying components for the project and their
management. This contribution "in kind" will form the main part of the overall contribution ofeach party during the construction phase.

3The eighth negotiation meeting (N8) which was held on 18 and 19 February in St Petersburg
saw the return of the USA, announced on 30 January 2003 by President Bush, and the arrival
of China at the negotiating table. The American Delegation highlighted the extremely detailed
analysis that the United States had carried out before deciding to rejoin ITER. The Chinese
Delegation gave the reasons for China joining the project: as the largest developing country,
China has a great need of alternative energy sources to fossil fuels. It considers that ITER
could lead to a new form of energy contributing in the long term to peaceful and sustainable
development.
It is anticipated that the bases and principles established in the course of previous negotiations
will not be called into question by the American and Chinese new arrivals, that the level ofparticipation of each will be limited but significant and that they will not propose new sites
for ITER.
The international organisation envisaged for ITER
The negotiators soon reached a consensus that an organisation under international law shouldbe the legal instrument used for ITER implementation. This Organisation would have aduration of thirty-five years with the possibility of an extension of a maximum of ten years. It
would have legal existence and would be granted privileges and immunities by the parties andthe host country which are similar to those normally granted to international organisations.
The ITER agreement will also cover the decommissioning of the machine and the terminationof the Organisation.
The activities of the Organisation will be supervised by a Council in which each of the parties
will be represented. Except for a limited number of areas where unanimity will be required,decisions will be taken by consensus. In the absence of a consensus, they will be taken by avote in which the weighting of each of the parties will depend on its contribution to theproject. A Director-General and a project team will be responsible for the proper day-to-day
running of the Organisation.
Given the scale and complexity of the project, it has also been accepted that each party shouldhave only one clearly identified interface with the Organisation, managing its contribution
both in cash and in kind.
The specific requirements of the host country concerning legal and administrative
authorisations, in particular the health and safety of staff and the public, will be specified in
the agreement itself and in a "host" agreement which will have to be concluded between the
Organisation and the host country.
Current discussions concern the resources of the Organisation and its management, inparticular the principles to be followed concerning staff, financial regulations and thetechnical supervision of contributions "in kind" and interfaces between the Organisation andthe parties.
Structure envisaged for the management of the European contribution
Taking advantage of the experience gained from the integration of fusion activities in Europe,in particular with JET, a debate has been initiated in the programme committee, the CCE-FU,
between the "Associations", i.e. all the European laboratories working on fusion research, andthe Commission regarding the structure to be set up to manage the European contribution to
ITER and to serve as an interface with the international organisation responsible for the4

project. A joint undertaking structure has been adopted, the members of which would be
Euratom and the usual partners in the Community fusion programme.
The tasks of this undertaking would be, as a contract agent, to collect, manage and supply tothe international organisation contributions in cash and in kind from the members of the joint
undertaking. The setting up of the undertaking should be prepared at the same time as that of
the international organisation so that the EU is ready to manage its contribution to ITER assoon as the decision to implement the project is taken.
It has also been agreed to propose, as a second stage, a reorganisation of all European R&D
activities on fusion, including participation in ITER and the accompanying physics andtechnology programme which is necessary to take full advantage of international
collaboration.
3.

THE QUESTION OF THE SITE

At international level
At the present time, four sites have been proposed, one by Canada, one by Japan and two in
Europe, Cadarache in France and Vandellos in Spain. The technical studies for these various
sites have now been completed and the evaluation report was approved by the negotiating
parties in February 20031. Despite objective differences concerning the local geography andthe infrastructure to be installed, none of the four sites has an overwhelming technicaladvantage over the others, and the report confirms that each of them could meet the essential
technical criteria to host ITER. The choice of the site will therefore be a political decision,
which should rest on a set of technical and economic considerations (notably the construction
and operation cost estimates). The Commission envisages consulting on these questions withhigh level scientists who are involved by their functions in the political decision making
process. A consensus will probably only be reached on the basis of an agreement at a highpolitical level which will cover the choice of the site and the arrangements for sharing costs
and responsibilities among the international parties.
At European level
The negotiating directives adopted by the Council in May 2002 have allowed the Commission
to transmit to ITER partners the technical dossiers presented by the Member States. These
twin European candidatures, and the resulting fair competition, have so far served theinterests of the Community well by demonstrating the lively interest of the Member States
and the quality of their proposals. In order to strengthen still further the Community's
position, it is appropriate now to converge towards the identification of the EU site candidate
through a consensual and well regulated process. This is again a political question whichshould aim at maximising the benefits that the Community will draw from ITER construction,
including adding the most value to the research effort that the Community is developing in the
nuclear field. Recognising the political sensitivity of the subject , the Commission urges
France and Spain to pursue actively and constructively their bilateral discussions.
To facilitate these contacts and a convergence of the points of view, the Commission intends
to set in place a process that will contribute to identifying the elements of a consensus taking
1

The evaluation report which includes the Findings Reports specific to the four proposed sites as well as the
final report that summarises them is available at Internet site www.iter.org.

5into account elements other than the purely technical aspects. This process will pursued indialogue and in close co-operation with the authorities of the countries concerned. To thisend, the Commission envisages establishing objective criteria amongst which will figure
questions of "site preparation" and the scientific, technical and social environment, inparticular the political, financial and administrative guarantees that the site and its
surroundings can be prepared within the deadlines laid down and that the regulatory
authorities will be in a position to issue the necessary permits in good time. These criteria willbe established in concert with the French and Spanish authorities between now and the end of
May 2003. The process that will follow will call on the expertise needed to maximise thechances of ITER finally being realised in Europe, and should allow the Council to reach aconsensus in September 2003.
Meanwhile, it is essential that our international partners should be convinced that theEuropean Union supports the ITER project and is committed to its implementation in
Europe.
4.

ITER COST SHARING

Reference used by the European negotiators
The European negotiators have used the scenarios for the sharing of ITER costs among thevarious parties which were set out in the staff working paper [SEC(2002)276 of 7.3.2002]
which the Council, in the negotiating directives adopted in May 2002, took as a reference fordiscussions on funding. This reference may be summarised as follows:
The cost of ITER construction, estimated at €4 570 million at 2000 values, is divided into two
main areas, the "Non-Common Area" covering activities borne exclusively by the host party,
such as buildings and work connected with the site proper, and the "Common Area" shared
between all parties and covering components, particularly high-technology ones, the supply ofwhich could be shared.
In the abovementioned working paper, the non-common area is assumed to represent 20% ofconstruction costs, to be borne by Europe alone if ITER is constructed there. In this case thenon-common area would be financed in equal proportions by Euratom and the host Member
State.
The common area, which therefore represents 80% of construction costs, was expected to befinanced independently of the site chosen at a rate of 14% by Russia and 33% by each of thetwo other partners, Japan and the EU. Within the EU, the expected breakdown was 90% for
Euratom and 10% for all the other parties associated with the European fusion programme.
To sum up, European participation in construction (Euratom + associates) was expected toamount to 53% if ITER is constructed in Europe and 33% if it is sited in Japan. The scenario
of a Canadian site is highly specific, since the Canadian offer was limited to an advance offunds for the non-common area repayable by the other parties during the operation phase.
Development of the positions of the EU’s partners since May 2002
During the negotiations held since May 2002, the various parties have revealed what theirrespective attitudes might be to ITER cost-sharing.

6

Canada has stated that its offer was being reassessed to make it more attractive to the otherparties. A financial participation would now be considered even if ITER is outside Canada.
The Japanese position has also changed. Although its proposal to determine the contributionof a party in direct proportion to the amount of its GDP has been sidelined, it is very unlikelythat Japan will agree to contribute to the common area at the same level as the EU,
particularly if ITER is sited in Europe.
During the discussions it has also become apparent that the Russian contribution would belower than the 14% expected in the working paper of March 2002.
As stated above, it is anticipated that the level of participation of each of the new partners,
China and the USA, will be minority but significant and that neither will propose a site for
ITER. Finally other international partners could declare their readiness to collaborate in the
project, but in the absence of figures this possibility cannot be considered below.
New reference case possible in 2003
The working hypothesis to establish a new reference is that three partners (China, Russia andUSA) will together account for more than 30% and two partners, Japan and EU, will make alarger individual contribution and present a site candidate. Pending a revised offer from
Canada, the scenario "ITER in Canada" has not been considered as a reference situation. The
Canadian delegation evaluates the non-common area at 18% of total construction costwhereas the Japanese delegation puts it at 25%. The original European estimate, of a medianvalue of 20%, is maintained below.
In these circumstances, the shares would be as follows:
Non-Common Area

20%

Common Area

80%

China + Russia + USA

more than 30%

EU + Japanless than 50%

Maintaining EU - Japan parity in the common area would mean a share for each party of lessthan 25% (instead of 33% in the March 2002 working paper). The Japanese request to tie
rigidly the amount of such participation to the GDP of the partner would mean an EU
contribution to the common area of up to 33%.
With the aim of illustrating what ITER construction in Europe would cost the Community andcomparing this with the current fusion budget, a new reference case for the negotiating
position in the case of ITER construction in Europe, whether at Cadarache or Vandellos,
could therefore be defined in the following way. Assuming around 20% for the non-common
area and 25% for the EU share of the common area, the participation would amount to 45%,or around €205 million per annum on average over ten years. As a consequence, and if thecost sharing arrangements between Euratom and the European associates remain the same as
those presented in working paper SEC(2002)276, the contribution from the Community
budget to ITER construction costs would be around €150 million per annum on average (atyear 2000 values), or €600 million over four years. This figure should be compared with the€750 million that the 6th framework programme sets aside for all fusion research, including
up to €200 million for ITER implementation.

7

On the basis of the assumption that the EU contribution to the common area is the same
whether or not ITER is sited in Europe, the 2002 working paper concludes that the total costof the project for Euratom (construction + operation) would be more or less identical whether
ITER is constructed in Europe or Japan. This is due to the contribution from the host Member
State which continues during the operation phase. Making the same assumptions, thisconclusion would remain valid.
5.

COLLABORATION ON ITER AS PART OF A FAST TRACK APPROACH

A study carried out in 2001 at the request of the Council Presidency to examine the feasibilityof a fast track towards fusion energy concluded that the design of ITER is sufficiently flexible
for it to be used to carry out, in anticipation of the following stage, more detailed studies on
aspects related to energy production. These studies would have to be accompanied by aspeeding-up of research into the materials needed for future reactors.
Taking such a “fast track” approach would naturally require additional funds for the research
programmes that will follow FP6 even if savings could be achieved through wider
international cooperation on materials research, particularly the joint creation of a neutron
source which is optimised for such use. The IFMIF (International Fusion Materials Irradiation
Facility) project, the study of which is currently the subject of cooperation similar to that for
ITER, would meet these requirements.
Coordinated planning of the two main international fusion projects, ITER and IFMIF, could
be considered with our partners. The detailed studies for IFMIF could be launched at the sametime as ITER construction begins, and the construction of IFMIF could begin around 20092010. The decision to construct IFMIF and the choice of its location will certainly be linked
to the prior decisions on ITER. Thus it is very probable that IFMIF will be implemented
outside Europe if ITER is constructed in Europe. In that case, a very provisional estimate of
the Community financial contribution would be around €15 to 20 million per year over ten
years.
6.

STAGES OF THE DECISION-MAKING PROCESSThe decision-making process must obviously take account of the constraints to which allparties to the project are subject. Emphasising that the detailed studies on ITER werecompleted successfully, the decision on the specific programme of research and training(2002-2006) states that the construction of ITER could actually begin in 2005-2006. In thelight of this planning schedule and the constraints of the political timetable of ourinternational partners, the negotiating parties set the end of 2003 as the target for establishingand transmitting to their respective political authorities a draft agreement on ITER
implementation, including the site and the financial contributions of the parties involved.
The countdown for the Community decision-making process from the end of May should
therefore be as follows:–

End 2003, submission of a proposal for a Council Decision on the agreement of theconstruction, operation and decommissioning of ITER. At the same time theCommission submits to the Council a proposal for a Decision concerning theestablishment of the joint undertaking responsible for the European contribution to
ITER.

8

–

The convergence process described at point 3 should be concluded during the courseof summer 2003, such that the Council could achieve a consensus on this subject in
September 2003.

–

At the end of May 2003, the Commission notifies the additional objective criteria
guaranteeing that the sites proposed actually conform to the requirements laid down.

7.

CONCLUSION

The outcome of fusion research, the use of a "sustainable" energy source, concerns the wholeof humanity. The best illustration of this is given by the statements of those countries which
declare their interests in participating in ITER. However, Europe has a special interest in
carrying out this project since, thanks notably to the integration of all its research activities
under a Euratom programme, the European Union is a world leader in this field.
The scale of the cooperation which is being established for ITER implementation makes it
one of the largest international projects in existence. If ITER is constructed in Europe, the EU
will be able to consolidate its position of excellence and take full advantage of theinvestments made, whether in terms of transfer of know-how to European industry or theparticipation of associate laboratories in the construction and operation of the project.
For this reason, given the importance of what is at stake and the progress of negotiations, theCommission is bringing the Council's attention to the fact that it is important for the European
Union that the ITER project should be constructed in Europe and that the European site which
will compete with candidate sites presented by our international partners should be identified
as soon as possible.
The Commission will of course keep the Council and the European Parliament informed ofdevelopments in the negotiations on the ITER project. The Commission hereby notifies themof its intention to submit by the end of 2003 two proposals for decisions, one concerning theinternational agreement on ITER implementation and the other the structure of the joint
undertaking which will be responsible for the European contribution to this project.

9

ANNEX
Background1.

At the end of the ITER Engineering Design Activities (EDA) in July 2001, andfollowing extensive domestic scientific, technological and economical assessments
by each of the Parties2, the ITER Council concluded3 that the objectives of the ITEREDA Agreement have been fully met and consequently recommended to the Parties "to take the necessary steps to realise a Joint Implementation of ITER as the next stepin the development of fusion as a source of energy for peaceful purposes".

2.

In light of this successful completion of the EDA and following the submission by
the government of Canada of an offer to host ITER at Clarington near Toronto, intergovernmental negotiations on the possible Joint Implementation of ITER started in
November 2001 among four Participants - Canada, Euratom, Japan and the RussianFederation. Seven such meetings took place in the period to end 2002, including twoheld in the European Union - at Cadarache, France in June 2002 and in Barcelona in
December 2002. At the Eighth Negotiators Meeting on 18-19 February 2003 in St
Petersburg (RF), China and the USA acceded to the Negotiations.

3.

The European Commission participated in the Negotiations under the Directives of aCouncil Decision of 16th November 2000. This mandate was at first limited to thedevelopment of a legal frame for possible joint implementation of ITER, if and when
so decided, and was without prejudice to questions of siting and of cost sharing.

4.

By a Decision of 27th May 2002, arising from a joint proposal of Commissioners
BUSQUIN and LOYOLA DE PALACIO, the Council amended its Directives4, in particular
to authorise the Commission "to transmit to the Parties offers of potential candidates
for European Sites proposed by Member States and to negotiate with the Parties
financing and cost-sharing arrangements in conjunction with site offers."
Accordingly, in June 2002 the Commission transmitted to the other Participants
proposed European site candidatures at Cadarache, France and Vandellos, Spain. (Atthe same time Japan also tabled an official site candidature at Rokkasho-mura,
Aomori Prefecture.)5.

The amended mandate also provided for the Parties to establish appropriate
transitional arrangements to ensure a smooth transition towards the Joint
Implementation of ITER.

6.

Council Decision of 3 June 2002 concerning the 6th framework programme(Euratom) stressed that the progress made on the research and the result obtained, inparticular with the European JET tokamak, now makes it possible to consider
moving on to the Next Step which would produce a machine capable of generating
fusion reactions in conditions comparable to that of an energy producing reactor. The
completion of the preparatory work on the detailed design of the Next Step in thecontext of the ITER international co-operation project makes it possible to take adecision about the launching of this project and the construction of the machine.

2
3
4

EU Domestic Assessment of the ITER-FEAT Final Design Report, May 2001
Final Report of the ITER EDA, ITER EDA Documentation Series No. 21, IAEA, VIENNA, 2001
SEC (2002) 205 Final

10

Status of ITER Design and Cost Estimates
Status of the Design
7.

With the completion of the EDA, a complete, detailed and mature design for ITER
was put at the disposal of the Parties, with a supporting body of validating analysis
and R&D and other technical information, which meets the detailed technicalobjectives and cost objectives set for it, including those relating to safety andenvironmental considerations. Since then, further collaborative scientific andtechnical work on ITER was undertaken within the frame of so-called "Co-ordinatedTechnical Activities" (CTA) in support of the Negotiations. This work was based on
the design established in the EDA phase and was aimed at maintaining the integrityof the design and at enabling a smooth start of ITER construction if and when so
decided. The CTA phase expired at the end of 2002 and was superseded by the ITER
Transitional Arrangements (ITA) under which the activities ensuring the design
integrity and preparation for the possible implementation have continued. Both the
CTA and ITA have been established under IAEA auspices through exchanges ofletters between the participants in the negotiations and the IAEA Director-General.

8.

Since the completion of the ITER-EDA, the European fusion activities have beenfurther focussed on ITER through the scientific and technological programmes
undertaken within the framework of the European Fusion Development Agreement(EFDA) and through the Euratom Contracts of Association. The European staff
complement within the ITER International Team has been broadly maintained.

Cost Estimates
9.

Information on the estimated costs of ITER was presented to the Council in March
11, 2003 2002 in the Commission Staff Working Paper, "The Cost to Europe of
ITER Joint Implementation According to Various Hosting Scenarios"5 The Working
Paper summarised cost estimates for the various phases of ITER Implementation
based on the figures reported in the "Summary of the ITER Final Design Report",
and indicated the costs that Europe might bear on the basis of first approximate
assumptions on the possible cost sharing schemes that might be negotiated, and how
those costs might be distributed within Europe.

10.

At the end of the EDA the negotiating Parties had each undertaken detailed
evaluation and confirmed their acceptance of the overall Cost Estimates for ITER
presented by the Project as forming a complete and sound basis. As there has been nomaterial change to the design since the end of the EDA the current participants in
Negotiations have undertaken no further overall review of the costing. Nevertheless,in the context of its discussions of a US strategy for a burning plasma, the US DoEestablished a special Committee which visited the ITER Joint Work Site in Garchingon November 21-25, 2002 to undertake an assessment of the ITER cost estimates.
The Committee's findings were uniformly positive, concluding for instance that "..theITER Team has prepared a complete cost estimate that is based on soundmanagement and engineering principles...” and “The credibility of such a value
estimate is supported by the design and R&D results that are unusually mature for ascience project facing the decision to fund construction."5

SEC (2002) 276

11

11.

The possible cost sharing schemes are now starting to figure explicitly in the courseof the Negotiations. The other participants are aware of the working assumptions
used in the Commission Staff Working Paper, which provided the initial basis of theEuropean position in the discussions.

Accession of third parties to the ITER Negotiations
12.

A major development in the ITER Negotiations has been the accessions of China andthe United States at the N8 Meeting in February 2003.

13.

The Council Directives to the Commission directs the Commission to negotiate with"ITER EDA Parties and other qualified countries". Thus the mandate provided for
the EU to accept participation in Negotiations of the USA, as one of the signatories
to the ITER EDA Agreement, once it had declared its wish to do so.

14.

With respect to third countries such as China the negotiators reached consensus inNovember 2002 on the factors that could qualify a third country. In particular, a third
country requesting access to the Negotiations would be expected to declare that it
intends to make a substantial contribution to the Project and that it would share thecommon understanding and results achieved in the negotiations up to the date of its
accession. There should also be a verification of the technical capabilities of the third
party, and assurances of adherence to peaceful uses and non-proliferation principles
and respect for the intellectual property rights that the existing ITER Parties haveestablished through their co-operation to date. Accession to the Negotiations by athird country would require unanimous agreement among the current Participants.

15.

On 30th January 2003, President Bush and Energy Secretary, Spencer Abraham,announced that the United States would join the international negotiations on ITER.
The US was accordingly invited to and participated in the N8 meeting 18th-19th
February 2003 in St Petersburg.

16.

The accession by China followed a formal request to join the Negotiations from the
Chinese Ministry of Science and Technology, dated 10th January 10, 2003, which
incorporated the statements of intent and other required undertakings. After an interservice consultation, and given the positive report of a mission to evaluate China's
technical capabilities, the EU delegation supported the request for access to thenegotiations under the conditions expressed in the request. Subsequently, agreement
was reached with all other Participants to accept China's accession to the
Negotiations, starting at the N8 Meeting.

17.

The Republic of Korea also expressed its interest in joining the negotiations andinformal interactions are expected to explore the legal and technical aspects of a
possible formal request.

18.

None of the three above countries has given any suggestion of interest in proposing
to host ITER.

19.

Following the accession of the additional participants to the Negotiations areconsideration of the steps made to date among the current participants on the
allocation of responsibilities for procurement is necessary.

12

Cost Sharing among the International Partners
Procurement Allocations
20.

At informal technical level the Participants have started to discuss the so-called"procurement allocation" i.e. the proposed allocation among the Parties ofobligations to contribute in kind the various component elements of ITER.
Discussions have focussed on large and technically demanding procurements thatneed to be started most early in the construction phase, without prejudice to theoverall scheme of cost sharing. The process can be completed only in the context of aconsensus on the site and associated overall cost sharing.

Summary of Cost Sharing assumptions presented in Doc. SEC (2002) 276
21.

The international cost sharing aspects of the Commission Staff Working Paper werebased on a number of key assumptions made in the light of circumstances as theystood at that time. They were based on the principle of equality stated in the ITEREDA Agreement, but modified in recognition that the Russian Federation could not
be expected to contribute the same level of resources as EU and Japan. Theseassumptions have to be revisited in the light of the evolution of the Negotiations.

22.

At the beginning of the Negotiations, the number of partners in the joint
implementation of ITER was presumed to be limited to three (or four if ITER would
be hosted in Canada). As to cost-sharing, the hypothesis was made that the Host
Party would contribute to the capital cost - the so-called "non-common area" of thoseparts of ITER construction such as the buildings that are inherently best suited or can
only be provided from a local source. Whilst its value falls in a bracket centredaround 20% of the estimated total capital cost of ITER, it is recognised that the
precise figure will be a matter for negotiation. The basis for sharing the costs of theremaining so-called "common area" - approximately 80% of the total - remained tobe resolved. The Russian Federation was assumed to contribute the equivalent of
about 14% of the total cost while Europe and Japan would contribute equally to theremaining 66%.

23.

According to this preliminary simplified breakdown of cost sharing of the capital
cost for construction, Europe would have contributed 33% in the common area
wherever ITER would be hosted. The European share as a whole for ITER
construction in Europe (for the Community share see Para. 32) would have been
53%. This share would have been 33% if ITER was constructed outside Europe.

24.

The option of siting in Canada represented a special case in which the Host Party
proposed the non-common area to be financed largely through private sector loans in
anticipation of a flow of revenues during ITER operations, guaranteed by the nonHost Parties.

13

Evolution on cost sharing assumptions during Negotiations
25.

In discussing the allocation of responsibilities among the Parties for procuring theelements of ITER construction, it has now become apparent that the value of thecontributions that the Russian Federation envisages to provide would be closer to
10% than the previously assumed 14%.

26.

Japan, in presenting its site offer in June 2002, proposed a new cost sharing criterion,
based on a link between the relative contributions to the common area from EU andJapan and their relative GDP's; on this basis the EU would contribute twice theJapanese contribution.

27.

At the December 2002 Negotiations meeting in Barcelona, the EU announced that it
could not accept any link between cost sharing and GDP's of the Parties andrecommended to consider a pragmatic approach, without rigid pre-conditions that
may block a solution. Japan reacted that "some basis for discussion is needed since it
is not feasible for each Party to contribute equally. Consideration includingreflection of economic scale on cost sharing and requiring a certain level ofcontribution by all Parties could realise each Party's contribution in a way which isas balanced as possible".

Canada28.

The Canadian Government position is at this moment under review. The Canadian
Delegation announced at the December 2002 Negotiation Meeting that it had advised
its government that "the Canadian offer to host had diminished chance of successgiven current developments in the Negotiations unless the Government of Canada
agreed to participate financially in the project. The Government of Canada is now
reviewing its offer in concert with the Government of Ontario and with Iter Canada
and its member organizations. The Canadian Negotiators anticipate a revised offerby the end of March 2003". It is expected that Canada's hosting offer may become
more comparable to those from Europe and Japan as concerns the non-Common area
and that it might revise its former position that it would not participate in ITER
implementation outside of Canada.

New participants in Negotiations
29.

As noted above, the current Negotiating Participants have made clear that any
country newly acceding to the Negotiations would be expected to provide asubstantial contribution to the project at least comparable to what is envisaged bycurrent participants in the Negotiations. The formal request from the Chinese
government included such a statement of intent.

30.

For the US, the National Research Council's "Burning Plasma Assessment
Committee" of the US National Academies recommended in December 2002 that:"The United States should negotiate a level of involvement consistent with the size of
the U.S. contribution to the program, which at a minimum should guarantee accessto all data from ITER, the right to propose and carry out experiments, and an
appropriate role in producing the high-technology components of the facility."14

At the N8 meeting the US delegation noted that "the US wishes to make a significant
contribution that is comparable to other non-host parties."
31.

Thus the accession of new participants to the Negotiations intending to makesubstantial contributions (and of a possible revised Canadian position) suggests thatfeasible cost sharing schemes could result from the Negotiations, notwithstanding the
reduction in the expected Russian contribution and the Japanese unwillingness tomatch the European input.

Cost sharing within the European Union
32.

With respect to the cost sharing within Europe, the assumptions made in theCommission Services Working Paper were that the costs of the non-common area of
construction would be shared equally between the Community Budget and the Host
Member State and the costs of the Common area would be borne 90% by theCommunity Budget, the remaining 10% to be shared by the Associates. The possible
cost sharing of the European contribution to total costs during operations phasewould be borne 75% by the Community Budget if ITER is hosted in Europe and 95%
if it is hosted outside Europe.

Joint Assessment of Specific Sites
33.

The four candidate sites have been assessed within the framework of the
Negotiations. A technical assessment process called the Joint Assessment of SpecificSites (JASS) was undertaken in the period September to December 2002 by an AdHoc group composed of experts from the four Participants in the Negotiations at thattime. It was developed on the basis of detailed input documents based in turn on indepth studies performed by the proponents. The report on the JASS was approved at
the N8 by the four Participants that commissioned and undertook the assessment,with the main conclusion that:“ …despite the differences between the candidate Sites, the JASS ascertained that all
four Sites are sound and fully capable to respond to all ITER Site Requirements andDesign Assumptions, as approved by the ITER Council in its January 2000 meeting.
As a result of the assessment process, the JASS Ad-Hoc group has
concluded that ITER may be successfully implemented at any of the candidate Sites.
Some differences amongst Sites do however exist. The assessment of some issues led
to the identification of appropriate mitigation measures to be put in place by therespective Hosts.”

Exploration of a Fast Track34.

On the initiative of the Belgian Presidency, Experts examined in November 2001 thepossibility of a fast track towards fusion energy production. Following this approach,the next two generations envisaged today beyond ITER could be combined into asingle step that should be designed as a credible prototype for a power-producing
fusion reactor. The Meeting of Experts concluded that ITER is the essential step
towards energy production on a fast track and that construction should start as soon
as reasonably achievable. In addition, there would need to be an appropriate highenergy, high intensity neutron source such as the International Fusion Materials
Irradiation Facility (IFMIF) to test and verify material performance in fusion reactor

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conditions. It also stressed that the two major international ventures on fusion energy
development, i.e. ITER and IFMIF should proceed in a co-ordinated way, with therealisation of ITER starting in parallel with the detailed engineering design of IFMIF.
35.

This work has had an influence on the international partners. In the US, the Fusion
Energy Sciences Advisory Committee submitted a preliminary report to the USDOE
on the prospect and practicability of electricity into the US grid from fusion in 35
years. A more detailed plan, including cost estimates is due for March 2003. Japan
has established a committee under the Atomic Energy Commission, to discuss future
Japanese R&D plan, including the acceleration of the realisation of fusion energy
within about 30 years. The Russian Federation also declared support for a fast track
approach.

36.

Technical work is continuing in the framework of the IEA and the definition of an
appropriate international framework to conduct the Engineering Validation andEngineering Design Phase of IFMIF is in progress.

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