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Russia faces threat of sanctions on nuclear power industry as Germany backs uranium ban

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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 itis 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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