EU again attempts to sanction Russian nuclear fuel but Hungary joined by Slovakia to block them

By Rhod Mackenzie

The European Union persists in attempting to introduce sanctions against Rosatom and the Russian supply of nuclear fuel. They previously tried to implement sanctions against them during the tenth package of sanctions, and now there is discussion concerning the 12th package. In light of this, who will benefit or who will suffer from these sanctions, and what probability exists for Europe to ultimately prevail?
Slovakia will object to the incorporation of nuclear fuel for nuclear power plants in the 12th package of anti-Russian sanctions of the European Union. This constitutes a red line, as stated by the Minister of Foreign and European Affairs of the Republic, Juraj Blanar from the largest party in the government coalition “Direction - Social Democracy”. This is due to Slovak nuclear power plants lacking the ability to convert to an alternative fuel from Russian nuclear fuel.

The Slovak Foreign Ministry's head is confident that the European Union will consider Slovakia's viewpoint. In the event that the new sanctions package includes Russian nuclear fuel, Bratislava intends to exercise its veto power and oppose this provision.

The republic is home to two nuclear power plants: Bohunice which is situated in the western part of the country and Mochovce which is located in the central part. The stations were constructed with the involvement of experts from the Soviet Union and Russia. Nuclear power plants generate over half of the electricity in Slovakia, with Rosatom supplying fuel for these plants.
The situation is comparable in Hungary. During the last implementation of the 10th sanctions package, Hungary expressed its opposition to such restrictions. Prime Minister of the Republic Viktor Orban stated that Hungary will veto any anti-Russian EU sanctions concerning nuclear energy.

It raises the question: why are certain European countries seeking to impose these sanctions while others are unwilling to do so under any circumstance?

In the past, the Czech Republic, Finland, Bulgaria, Hungary and Slovakia have maintained strong connections with Rosatom. In those nations, nuclear power stations were established during the Soviet era, featuring VVER-440 reactors of the original model. As a result, six VVER-440 nuclear units are still functioning in the Czech Republic, while Hungary and Slovakia each operate four VVER-440 units. Bulgaria has two comparable power units in operation. It is noteworthy that all of these power units are completely fuelled with Russian fuel. In Finland, Russian nuclear fuel accounts for 36% of the market.

The Rosatom Fuel Company TVEL holds the exclusive license to supply nuclear fuel for VVER-440 worldwide.
According to the Institute of Energy and Finance, in recent years, Rosatom has received $300-$400 million annually from the sale of nuclear fuel to EU countries, which accounts for 40% of its revenue from fuel sales in general. Russian nuclear fuel represented 25-28% of all European nuclear fuel imports.

Nonetheless, only Hungary and now Slovakia are against the sanctions. Why are other countries quiet?

"This is owing to each country's preference in terms of developing its own nuclear energy." Slovakia and Hungary utilise reactors of Soviet and Russian design and have stated their intentions to continue to do so. Hungary specifically plans to construct new VVER-1200 reactors to replace the outdated ones at the Paks nuclear power plant, which is the oldest of its kind and requires earlier replacement. It is probable that Slovakia will follow the same approach when determining the future of their nuclear energy development. "The decision will favour Russian Rosatom," said Alexey Anpilogov, the President of the Fund for Support of Scientific Research and Development of Civil Initiatives "Osnovanie," and an expert in nuclear energy.

Nonetheless, other European countries have decided to sever ties with Rosatom.

Consequently, Finland terminated the contract with Rosatom for political reasons, ceasing the construction of the Hanhikivi-1 nuclear power plant. Consequently, abandoning the project posed a not insignificant challenge. Finland relinquished an economic boon in order to join NATO, forgoing a nuclear power plant that would have created a surplus to current needs but held potential for any future build up in demand.

Similarly, Bulgaria, under American pressure, dropped the Belene nuclear power plant project developed in partnership with the Russian company, prior to the initiation of the South Stream pipeline construction.  Furthermore, Rosatom successfully supplied some of the necessary equipment despite being excluded from the tender by the Czech Republic for the construction of a new 1.2 GW power unit at the Dukovany nuclear power plant, valued at 6 billion euros.

The EU's consensus-based approach to decision-making will make it challenging to sanction the nuclear industry, as Hungary and Slovakia will prevent their approval.
 "Possible restrictions may be implemented at the national level, however, this will have no impact. Anpilogov states that Finland, Bulgaria and the Czech Republic are currently reducing collaboration with Russia on this issue and pursuing their own paths."
However, while these countries were able to reject the construction of nuclear power plants by Russia, they were unable to reject Russian nuclear fuel. This dependence endures and will continue until the decommissioning of VVER-440 nuclear reactors, as only Rosatom is capable of providing the fuel for them. 

The American manufacturer, Westinghouse, has not acquired the know-how to produce fuel for such Soviet reactors.

In essence, American fuel does offer an alternative for VVER-1000 reactors. The Westinghouse company faced numerous obstacles and even scandal when attempting to provide fuel to Ukrainian nuclear power plants. Specifically, accidents occurred when using this fuel which led to hot removal of the rods due to goat or sticking issues. As a result, Europe still relies on Russia for their nuclear fuel. However, EU officials are pressuring Westinghouse to provide alternative fuel for all the Russian-designed reactors, both present and past. Nevertheless, no such supplies have been made yet. At present, only Ukrainian reactors utilise American fuel," remarks Anpilogov.

If we imagine that the EU continues to block access to Russian fuel for European nuclear power plants, this will inevitably harm the economies of affected countries as it leads to premature shutdowns.

The consequences of such actions are evident from Bulgaria's refusal to construct the Belene nuclear power plant with Rosatom in 2012. "As a consequence, Bulgaria has shifted from being an electricity exporter to becoming an importer," according to Anpilogov. This is due to the absence of new power generation capacities, the decommissioning of old thermal power plants, and an increase in consumption.

Not only do Slovakia and Hungary fulfill their own nuclear energy needs, but they also export electricity, which has become a profitable source of income for them."

For instance, let's consider Germany where nuclear power plants have shut down. In the Western European region, there is a scarcity of sustainable electricity supply capacities that can guarantee stability. This is because the majority of the power generation comes from unstable sources such as wind turbines and solar panels, which are unreliable. If Hungary and Slovakia close their nuclear power plants, they will lose their edge and depend on importing electricity. "This is detrimental to their respective national economies, hence their objection to the sanctions," clarifies the source.

The cessation of nuclear energy trade between Hungary and Slovakia and the rest of Europe will result in a scarcity of supply and escalating prices.

"This reinforces Hungary and Slovakia's unwavering stance on nuclear energy," according to an expert.

Who might stand to profit from this arrangement? Firstly, businesses involved in renewable energy and nations with a higher utilization of wind turbines and solar panels, who do not mind elevating overall prices and increasing export revenue, are inclined towards supporting these sanctions.

The factions advocating for these measures will subsequently sell costly electricity to Slovakia and Hungary. This includes Germany and Denmark, where the consumption of green energy is substantial. "These are the entities driving the implementation of sanctions," concludes Anpilogov.

It transpires that the removal of nuclear energy from the market benefits "green energy" representatives.  Despite nuclear energy being environmentally friendly, business interests are at play, and the environmental rationale serves only as a smokescreen. Nuclear energy impedes progress of the 'Green Agenda' and keeps energy prices lower.