Catch-235: Western Dependence on Russian Nuclear Supplies is Hard to Shake

Despite the expanding economic restrictions placed on Russia by the US, the EU and others, the Russian nuclear sector, as well as state-owned enterprise Rosatom and its subsidiaries, have largely escaped sanctions. As detailed in an earlier report by the author, Russia has continued to export significant amounts of nuclear technology and supplies since its full-scale invasion of Ukraine in February 2022, including to members of the EU and NATO. Additional trade data, not included in the original report but examined by the author since, also shows significant imports of Russian goods by the US, France and others under Harmonized System (HS) Code 284420, which includes enriched uranium (that is, uranium with higher concentrations of the uranium-235 isotope than mined uranium ore) used for the production of nuclear reactor fuel.

The value of HS Code 284420 imports from Russia into the US and France totalled just under $1.2 billion in 2022. This is in addition to the over $1 billion worth of Russian nuclear energy-related exports in the last calendar year detailed in the previous report, which included exports of nuclear reactor fuel, reactor components and mined uranium. However, the total amount of Russian nuclear energy-related technology and material worldwide is undoubtedly even higher. Statistics on Russia’s trade in some commodities and with certain countries remain challenging to source. For instance, the dataset reviewed in the original report – which is based on Russian customs data – does not capture any Russian enriched uranium exports for 2022 at all. It is possible that certain nuclear energy-related exports may be recorded under Russia’s ‘secret’ trade code, which covers strategic commodities like weapons-related transfers. Media reporting has also covered Russia’s role in Kazakhstan’s uranium mining sector; it is not clear how much natural uranium in Kazakhstan is mined by Russian companies, or whether Russia may be generating revenue – and how much – from uranium transported from Kazakhstan through Russia, including to customers in Western Europe.

Dependencies on Reactor Fuel and Technologies

A number of factors have resulted in global dependencies on the Russian nuclear industry, some of which were outlined in the author’s earlier report. Countries that host VVER reactors of Soviet and Russian design – such as Bulgaria, Czechia, Slovakia and Hungary – have historically depended on the Russian supply of VVER nuclear fuel assemblies. Transitioning to alternative nuclear fuel suppliers presents some challenges, but options free of Russian involvement do exist. Westinghouse Electric Company in the US has supplied VVER-1000 fuel to some Ukrainian and Czech reactors, and has recently signed agreements for the supply of VVER-1000 fuel to Bulgaria. Western-produced VVER-440 assemblies have also previously been supplied to the Loviisa NPP in Finland (from 2001 to 2007), and an agreement for renewed Westinghouse supply was signed in November.

Meanwhile, a number of states – including China, India, Turkey, Bangladesh and Egypt – are currently constructing new Russian reactors. These projects are likely to continue unabated, as there is a dearth of alternative suppliers for VVER construction and many of Russia’s current customers have not expressed strong opposition to Moscow’s invasion of Ukraine (although the direction of causation is unclear; ongoing NPP construction projects may be one of the factors contributing to countries’ unwillingness to support Western economic pressure on Russia). When it comes to future power plant construction projects, other reactor vendors do exist, but Russia still dominates the export market by a wide margin.

Dependencies on Uranium Enrichment and Conversion

Yet perhaps the biggest elephant in the room is the continued import by Western countries of Russian enriched uranium, as well as Western dependence on Russian conversion and enrichment services. According to import data made available by the French government and reviewed by the author, France imported €359 million (about $377.5 million) worth of enriched uranium from Russia in 2022 (HS Code 28442035), up from €92.4 million (about $109.2 million) in 2021. However, the lower figure in 2021 may be a reflection of the fact that, in previous years, some French purchases of Russian enriched uranium were reportedly delivered directly to fabrication facilities abroad. France also hosts a domestic enrichment capacity and exports enriched uranium to the US, the UK, Japan, Sweden, Germany and South Korea. Recent reporting has documented the delivery to Germany, through the French port of Dunkirk, of Russian enriched uranium for use at a French fuel assembly plant in Lingen.

For its part, US import data shows that the US imported $829.8 million worth of Russian materials under HS code 284420 in 2022, and an additional $70 million worth in January 2023. Imports in 2021 stood at $645.5 million. HS Code 284420 captures some other materials besides enriched uranium, and the US trade data reviewed by the author does not allow for disaggregation into more detailed categories. However, following consultations with experts, the author believes that the reviewed US HS Code 284420 data likely consists primarily of enriched uranium (in compounds such as uranium hexafluoride and uranium oxide), with other materials making up a small portion of the total. This would also be in line with documented US dependencies on Russian enriched uranium supplies.

Some have suggested that this dependency is in part a legacy of the ‘Megatons to Megawatts’ programme. The initiative – which ran from 1995 to 2013 – saw 500 metric tonnes of highly enriched uranium from dismantled Russian nuclear warheads converted into over 14,000 metric tonnes of low-enriched uranium (LEU) for US energy production. During the programme, this LEU accounted for up to 10% of US electricity production. Separately, efforts have been made to limit the supply of Russian enriched uranium to the US market through the so-called ‘Russian Suspension Agreement’, reached between Russia and the US Department of Commerce in 1992. The agreement has since been amended multiple times to include quotas on Russian enriched uranium supplies to the US. The latest amendment caps Russian supply at 20% of US demand (measured in separative work units or SWU) in 2022 and 24% in 2023, dropping back down to 20% between 2024 and 2027 and to 15% subsequently. A number of recent legislative proposals have sought to outright prohibit US imports of Russian uranium and to revitalise the domestic industry.

Trade data made available by the Korea International Trade Association also shows that South Korea imported $184.4 million worth of Russian goods under HS Code 288420 in 2022, down from $251.7 million the previous year. Chinese government trade data shows imports of $492.6 million worth of Russian HS Code 284420 goods in 2022. Some have suggested that, should Russian uranium supplies be sanctioned in the West, Beijing may seek to boost exports of Chinese-origin enriched uranium to Western countries while itself purchasing Russian material.

Some strategic inventories of enriched uranium exist in the US and EU but are reportedly limited. There is also some room to increase existing enrichment capacity. However, experts tend to agree that additional Western enrichment capacity will have to be brought online to fully replace Russian supplies. Expanding enrichment capacity will take several years. Furthermore, uranium enrichment depends on sufficient conversion capacity. Much Western capacity for uranium conversion has been mothballed as a result of years of surplus supply. Additional conversion capacity is being brought back online in the US. There is also some limited room to expand Western conversion at existing facilities in Canada and France, and the potential for restarting conversion capacity at the UK’s Springfields facility. However, expanding Western conversion capacity to replace Russian supply will take time and resources.

Incremental Steps Forward

As such, diversification away from Russian supplies – whether in nuclear fuel assemblies, conversion services or enriched uranium – is technically possible, but will require time and resources. Proposals to immediately cut out all Russian nuclear supply are likely to be impractical. Instead, Western countries should work towards adopting, as soon as possible, policies which make Russian nuclear supplies less attractive, and which provide Western nuclear industry with the certainty and support it needs to make a sound business case for expanding conversion, enrichment, fuel fabrication and reactor export activities. This will have to include engaging with customers – both in partner countries and further afield – to incentivise demand for Western, instead of Russian, supplies.

In the meantime, Western governments should target specific individuals or companies within the Russian nuclear sector that have supported Moscow’s invasion of Ukraine; they may also consider raising the prices on the import of Russian materials. For instance, the UK recently sanctioned a number of Rosatom executives and introduced a 35% tariff on imports of Russian radioactive chemical elements and isotopes (HS Code 2844), which include enriched uranium. This is not a perfect solution. Such initiatives will not stop the flow of revenue to Rosatom or its subsidiaries but will allow Western economies to maintain necessary nuclear-related imports from Russia in the meantime, while complicating the efforts of Russian nuclear entities to support the war in Ukraine and hopefully incentivising a more concerted move towards diversification away from Russian supplies. Finally, Western governments should take care not to exchange dependencies on Russia in their nuclear sectors for similar dependencies on China, as Beijing will no doubt be eager to take over whatever nuclear market share Russia is forced to give up. The focus should be on building capacity domestically and across partner states.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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