Russia faces threat of sanctions on nuclear power
industry as Germany backs uranium ban
Move would hit the supply of uranium to the EU’s
Russian-built reactors, as well as new nuclear projects.
BY BARBARA
MOENS, ZIA WEISE, AMERICA HERNANDEZ AND LEONIE KIJEWSKI
April 29,
2022 7:45 pm
Germany has
thrown its weight behind demands to sanction uranium imports from Russia and
other parts of Vladimir Putin's civil nuclear industry in retaliation for his
invasion of Ukraine, five EU diplomats told POLITICO.
Such a move
could hit the supply of uranium that fuels the bloc’s Russian-built power
reactors, as well as new nuclear projects managed by Russia's Rosatom Western
Europe subsidiary, based in Paris.
Four of the
diplomats said sanctioning Russia's nuclear industry was discussed in a meeting
with EU ambassadors and the Commission earlier this week, with Poland and the
Baltic countries leading the calls to act.
"Germany’s
ambassador on Wednesday announced Berlin’s new position, saying they are not
only OK with oil sanctions, but they actively support an oil phaseout, rather
than just a price cap, and a ban on Russian uranium," one EU diplomat
said.
The fact
that Germany, the EU's economic powerhouse, is now on board makes the move
significantly more likely. A wide range of MEPs have also asked for nuclear to
be included in EU sanctions.
“It is
important for the Germans, Austrians and others that the EU reduces its energy
dependency on Russia across the board. This includes banning imports of Russian
nuclear fuels as well. For them it is a bit of a no-brainer,” an EU diplomat
said.
The
European Commission is working on proposals for a sixth package of sanctions
against Russia, including potentially measures targeting oil. Details are
expected to be discussed with EU countries in the coming days as European
governments seek to intensify pressure on Putin by cutting off the revenues
from energy exports that finance his invasion of Ukraine.
It is not
yet clear how soon sanctions on nuclear imports to the EU could be imposed.
But any
move against Russia's nuclear industry would not be pain free for Europeans.
The EU imports almost all of its uranium from outside the bloc. About 20
percent comes from Russia, making it the second-biggest supplier to the EU
after Niger.
Sanctioning
Rosatom’s Paris-based subsidiary is expected to be an especially sensitive
question for newly re-elected French President Emmanuel Macron. France has a
large nuclear power sector and collaborates closely with Rosatom on several
projects via the partially-state-owned EDF.
“Some
countries ... have worries over nuclear
safety,” said one senior EU diplomat. “You would need certain safeguards. But
there are certainly things that you can sanction that are not directly linked
to nuclear cooperation.”
German-Franco
splits
The
discussion lays bare a political fault line between the governments in Berlin
and Paris, the two big players within the bloc. Germany is a fierce opponent of
nuclear energy, and is aiming to shut down its remaining nuclear power plants
by the end of this year.
Berlin
isn’t content with switching off its own reactors but has sought to dissuade
other European countries from investing in nuclear. Most recently, Germany
criticized Belgium’s decision to delay its phaseout plans by a decade.
France, on
the other hand, gets more than 70 percent of its electricity from nuclear power
plants and is planning to build even more reactors. Macron has said nuclear
will play a key role in reducing the country’s emissions, as it’s a low-carbon
source of power, and in reinforcing the EU's energy independence. He wants to
build 14 new reactors by 2050, while continuing to develop renewables. The
country is also the only EU member to maintain a nuclear weapons program.
Yet, France
doesn’t rely on Russia for its uranium imports, as it mainly gets its fuel from
Kazakhstan and Niger.
French
energy giant EDF, which operates the country’s nuclear power plants, said it
“is closely monitoring the situation in Ukraine and its consequences on the
energy markets.” It added that “to ensure continuity and security of supply”
the company has long-term contracts “that are diversified in terms of origins
and suppliers.”
French
nuclear fuel supplier Orano said that it “has suspended all new shipments of
nuclear materials to and from Russia” since the end of February, and pointed
out that it has “very limited activities” in Russia, which represents less than
0.1 percent of its orders.
While
Germany has warned a gas embargo would mean economic ruin, France has shown
itself open to sanctioning Russian fossil fuels.
Running
empty
However,
the strongest resistance might not come from France, but from Eastern Europe.
For
Russian-made nuclear reactors in the Czech Republic, Hungary, Finland,
Bulgaria, Romania and Slovakia, there is no authorized nuclear fuel alternative
to Russian supply. While Slovakia, for example, has said it has enough nuclear
fuel to last through the end of 2023, a ban on Russian imports could be a
problem down the road.
“This is
very concerning as we are 100 percent dependent on Russian nuclear fuel
deliveries from the company TVEL,” said Karol Galek, Slovakia’s state secretary
for energy in the Ministry of Finance.
There have
been talks between those five EU countries and American supplier Westinghouse
about manufacturing a replacement fuel for those Russian reactors, Galek added.
“It seems that it could work, should work — but in two years, because there is
no immediate option. So this is the problem," he said.
Short-term
alternatives would come with a high price attached, said Mark Hibbs, a
Germany-based senior fellow at Carnegie’s nuclear policy program. Rumors of
nuclear sanctions — the U.S., for example, has also been mulling measures
against Rosatom — have already driven up uranium prices.
"We've
been seeing spot uranium selling at nearly $60 per pound, so if Europeans want
to replace the 20 percent of their Russian supply with others — Kazakhstan,
Canada, Australia, for example — they can do it, but it would cost them a
premium," Hibbs said. "Spot uranium they bought for future nuclear
fuel back in 2017 would have cost about $20 per pound and in 2020 it would have
cost about $30 per pound."
Moscow
doesn’t make much money from exporting nuclear fuel. But targeting the larger
infrastructure business which includes building reactors in the EU would
deliver a major financial hit to the Kremlin war machine.
“We hope
that Rosatom will be under sanctions and we hope that Rosatom business here in
Europe should be stopped with sanctions, because they have more than 25
different projects in Europe," said Ukraine’s Deputy Energy Minister
Yaroslav Demchenkov.
France
could be "more active" on this agenda, Demchenkov added. "It’s a
huge amount of money.”
Jacopo
Barigazzi, Jakob Hanke Vela and Louise Guillot contributed reporting.
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