Challenging Russia’s Dominance in Nuclear Power Market: Efforts by Japan, U.S., and Europe

Following the Russian invasion of Ukraine in February 2022, tighter sanctions have been imposed in the energy sector, Russia’s major source of income.

By Yuki Kobayashi


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1. The West’s Agony in the Nuclear Power Sector

Following the Russian invasion of Ukraine in February 2022, tighter sanctions have been imposed in the energy sector, Russia’s major source of income. Yet, the country’s global clout is increasing in the nuclear power sector. Despite concerted action in incremental natural gas and oil embargo, Western countries have excluded nuclear energy from sanctions on Russia.

One reason for the lack of sanctions is that in uranium enrichment, the initial process in nuclear fuel production, Russia holds almost 50 percent global market share. The U.S., EU nations, and especially Central and East European countries depend highly on Russia. Before invading Ukraine, Russia had enjoyed over 1 trillion-yen annual earnings from nuclear fuel processing and reactor exports. Even after the invasion, it has maintained the good performance, with 15 percent growth expected in the nuclear power sector*1, helping to fund its war costs. Also, nuclear fuel for small modular reactors (SMR) and fast breeder reactors (FBR), collectively called next-generation reactors, require a special process compared to the conventional nuclear fuel widely used around the world, and Russian companies dominate the market. Russian control in the global nuclear power market is likely to continue into the future.

The U.S. has become increasingly concerned that if the situation remains unchanged, Russia will not only have an inexhaustible war fund, but will also become a security threat, using nuclear fuel supply as a diplomatic weapon*2, and began developing measures to break away from Russian dependence in the nuclear power sector. As one of the few Western countries that possess uranium enrichment technology, Japan also needs to discuss how nuclear fuel supply should be on a global level.

This article will analyze Russia’s capability in the nuclear power sector and look at the uranium enrichment and nuclear fuel supply situation in Japan, the U.S., and Europe. Then, we will consider the possibility of a supply network advocated by the U.S., and the role of Japan.

2. Russia’s Overwhelming Presence in Uranium Supply Chain

(1) Russia’s Uranium Supply Capability

The uranium enrichment process is crucial for the commercial use of nuclear energy. Natural uranium only contains 0.7 percent of uranium-235, which releases enormous amounts of heat energy through the fission process. The rest consist of uranium-238, which does not easily fission. Therefore, unprocessed uranium cannot be used as nuclear fuel, and needs to be enriched to 3-5 percent by separating uranium-235 from uranium-238*3. Since companies affiliated with Rosatom, Russia’s state nuclear energy corporation, hold almost 50 percent market share in uranium enrichment, Russia’s role in uranium supply is immense (Figure 1).

Source: Based on Deallab “Global Market Share Analysis of the Uranium Enrichment Sector” (in Japanese), etc.

Until the early 2000s, the world’s uranium enrichment was led by Urenco, a British-German-Dutch consortium. However, Russia developed a more efficient method for extracting uranium-235 by layering mass-producible small centrifuges as cascades and succeeded in reducing costs, boosting its global share since 2010*4. In the EU, Russia’s neighbor, 20 Russian-made pressurized light water reactors (VVER) are in operation, mainly in the former communist bloc countries of Hungary and the Czech Republic in Central and Eastern Europe, which use uranium enriched by Rosatom affiliates as nuclear fuel.

Table 1 shows the output breakdown of Figure 1 by enrichment plant, providing a more vivid view of the world’s uranium enrichment situation. While Urenco’s centrifuges are widely used across Europe and the U.S., Rosatom exceeds in output, and it is apparent Russia has the initiative in uranium enrichment. Moreover, the so-called next-generation reactors under research and development by various countries, requires nuclear fuel made from high-assay low-enriched uranium (HALEU) produced by enriching uranium-235 up to 20 percent*5. Currently, Rosatom is the world’s sole processor and commercial seller of HALEU.

This is one big reason why the West cannot sanction Russia in the nuclear power sector. Although Japan is not dependent on Russia for uranium enrichment and nuclear fuel supply, it has not imposed sanctions on Russia in this field.

(2) Russia’s Earnings in the Nuclear Power Sector

As a result, Russia is making $1 billion (about 140 billion yen) annually just from uranium enrichment and related reactor fuel processing. Moreover, as shown in Table 2, Russia also has control in the reactor export market. Of the reactors exported during the decade from 2012 to 2021, over 60 percent was made in Russia.

Rosatom’s FY2021 earnings reached $9 billion (about 1.26 trillion yen)*6. Even after Russia’s invasion of Ukraine, the company remains competitive in the nuclear power sector, and expects 15 percent growth in FY2022 from the previous year*7.

Henry Sokolski of Nonproliferation Policy Education Center (NPEC), a Washington-based think tank comprising nonproliferation experts and policymakers, argues that it is obvious the nuclear power earnings are being used for Russian arms buildup, including nuclear weapons, and we should at least stop relying on Russia for uranium enrichment and nuclear fuel as soon as possible*8.  

3. How to Break Away from Dependence on Russia

(1) Difficult to Switch Enriched Uranium Supplier

Many countries agree with Sokolski’s claim itself. Since the Russian invasion of Ukraine, there were successive moves in Finland, the Czech Republic, and Slovakia to consider switching to U.S. suppliers for nuclear fuel, with some actually succeeding*9. However, because of the practice with nuclear power contracts, it is not easy to quickly change suppliers. Uranium enrichment and nuclear fuels are usually traded under long-term contracts of five to 10 years. Canceling a contract mid-term could risk being claimed a huge compensation from Rosatom. So, despite strong calls within the EU on sanctioning Russia, the European Commission, which is the executive organ, cannot take the plunge*10.

(2) The U.S. Is Taking Action

Meanwhile, the U.S. Biden administration has taken steps for concrete measures. It has decided to provide a $150 million (about 22 billion yen) subsidy to companies entering the production of HALEU, among enriched uranium*11. Although the HALEU market is still too small for this to be a blow to Russian revenue, there are two factors behind this policy.

One is concern toward Russia’s overwhelming dominance in the global nuclear power market today. The Biden administration focused on the self-sufficiency of HALEU, which is essential for next-generation reactors.

The other is that increased Russian (and Chinese) dominance in the global nuclear power market would become a security issue for the U.S. and Western nations. With stronger control on the market, they will have more say in the International Atomic Energy Agency (IAEA) and others where international agreements are decided. If Russia also dominates the next-generation reactor market, international rules for the transfer and management of nuclear material could be formulated in Russia’s favor*12.

Though Russia is not mentioned by name, the U.S. Federal Register website regarding the subsidy application for HALEU production states, “This lack of capacity is a significant obstacle to the development and deployment of advanced reactors for commercial applications.”*13 The operators are also aware of the situation, and Terrapower, a next-generation reactor development company funded by Microsoft founder Bill Gates, has suspended its plans to purchase Russian HALEU and announced it will delay the next-generation reactor operation for at least two years from 2028*14.

However, it is clear the U.S. alone cannot solve this problem, since it has no companies capable of providing the centrifuge essential for HALEU production (Table 2). Hence, the subsidy policy in the U.S. has prompted its allies to also consider measures and attention is on the moves of Urenco and Japan Nuclear Fuel Limited (JNFL) which can self-supply centrifuges in the Western world.

4. Considering Japan’s Role in Reducing Dependence on Russia

With this situation in the international nuclear power market, what can Japan do? I believe Japan should consider joining the U.S. government’s availability program to help establish a HALEU supply system for three reasons.

First, Japan has cleared the technical challenges and the system issues at home and abroad. Japan is one of the few Western countries with the technology for supplying centrifuges. Also, since HALEU contains less than 20 percent uranium-235 and not over 20 percent with concerns of military use, production can begin following the Nuclear Regulation Authority’s review, advance notice to the IAEA, and agreement on uranium enrichment plant inspections.

Second, this case is a security issue. It is important to build a supply system within the country or collaborate with allies to avoid influence by external pressure for uranium enrichment and nuclear fuel supply. This is especially so in the field of next-generation reactors, which may play a role in realizing a carbon-free society in the future. In fact, Japan shares this view with the U.S. and signed a Memorandum of Understanding (MoU) in January 2022 to cooperate in the development of next-generation reactors*15. If Japan remains dependent on Russia for next-generation reactor fuel, the MoU would be pointless. In addition, Japan, which has consistently made efforts since World War II on nonproliferation and the establishment of an international control system for nuclear materials, must retain its clout in the formulation of international rules on nonproliferation.

Third, HALEU production also has advantages in terms of economic rationality. The uranium enrichment plant within the nuclear fuel reprocessing facility complex in the village of Rokkasho, Aomori Prefecture, has an annual capacity of only 1,050 tSWU*16 (Table 1). This would just operate nine units if used for current reactors. With over 30 operable nuclear reactors in Japan, the domestic supply of nuclear fuel would be less than 30 percent, and not cost competitive. By producing HALEU with high added value, increased earnings can be expected.

Rokkasho reprocessing complex with the uranium enrichment facility in the village of Rokkasho, Aomori Prefecture (photo by the author).

A prominent member of the Institute of Nuclear Materials Management Japan (INMMJ) once told me, “In breaking away from HALEU dependence on Russia, the U.S. doesn’t want excessive reliance on Urenco. Japan should consider entering HALEU production, since it can prove its high-level nuclear technology, and it may also lead to building a well-balanced supply system among the allies.”*17

Yet, it is not easy to achieve this, since it is vital to recover trust in nuclear power use. With the 2011 accident at TEPCO’s Fukushima Daiichi Nuclear Plant, the public lost faith in nuclear power use in Japan. According to the “FY2022 Public Poll on Nuclear Energy” by the Japan Atomic Energy Relations Organization, only 25.1 percent agreed to the question, “It is possible to ensure the safety of nuclear power generation in the future.” Only 18.8 percent have positive views on the nuclear fuel cycle policy based on Rokkasho*18. In addition to risks of accidents, the final disposal place for used nuclear fuel is still undecided. Even after 12 years from the Fukushima accident, the public has deep-rooted distrust on nuclear energy use.

Unless Japan and other Western countries bring together their technologies and facilities to consider measures, Russian domination of the global nuclear power market is likely to continue into the future. Meanwhile, to realize countermeasures, it is vital to work toward restoring confidence in nuclear energy use.


*1 “Russia’s Rosatom sees 2022 exports growth at 15%,” Euronews, December 26, 2022.
*2 “Insight: America’s new nuclear power industry has a Russian problem,” Reuters, October 21, 2022.
*3 “About Urainum Enrichment,” JNFL website (in Japanese)
*4 Osamu Sudo, “Trends in Overseas Uranium Enrichment Companies,” Japan Atomic Energy Agency (JAEA), Nuclear Energy Overseas Topics, March 14, 2013. (in Japanese)
*5 The light water reactors widely used in the world today, use uranium-235 enriched to 5 percent, which fission and emit heat energy. In contrast, the fuel for next-generation reactors uses high-purity low-enriched uranium (HALEU), which requires a special process to enrich uranium-235 up to around 19.9 percent. According to Tomonori Iwamoto, secretary general of the Institute of Nuclear Materials Management (INMM) Japan Chapter, only one Russian company is currently involved in the processing and manufacturing of HALEU.
*6 Rosatom “For Journalists.”
*7 See note *1.
*8 Henry Sokolski “Stop funding Russia’s nuclear weapons,” THE HILL, November 13, 2022.
*9 “Westinghouse Reinforces its Commitment to Energy Security in Czech Republic,” Westinghouse Press Release, March 29, 2023.
*10 “Sanctions against Rosatom,” European Parliament Question for written answer E-000068/2023 to the Commission, January 11, 2023.
*11 Office of Nuclear Energy, “Inflation Reduction Act Keeps Momentum Building for Nuclear Power,” September 8, 2022.
*12 “The Emergence of China and Russia in Commercial Use of Nuclear Power: Strengthening of Global Nonproliferation System and Japan’s Role,” April 2021, The Sasakawa Peace Foundation. (in Japanese)
*13 “Request for Information (RFI) Regarding Planning for Establishment of a Program To Support the Availability of High-Assay Low-Enriched Uranium (HALEU) for Civilian Domestic Research, Development, Demonstration, and Commercial Use,” Federal Register, December 14, 2021.
*14 “Nuclear Energy Needs a Domestic HALEU Supply Chain,” August 12, 2022, Terrapower.
*15 JAEA et al, “Promotion of Japan-U.S. Cooperation on Sodium-Cooled Fast Reactor Technologies Contributing to Carbon Neutrality,” January 27, 2022. (in Japanese)
*16 The Separative Work Unit (SWU) is an indicator mainly used to define the effort required to enrich uranium from natural uranium. For weights in tons, tSWU is used. Japan Atomic Energy Agency (JAEA). (in Japanese)
*17 In response to my interview at the May 21-25, 2023 Institute Nuclear Material Management (INMM) annual meeting in Vienna.
*18 “Public Poll on Nuclear Energy (FY2022),” Japan Atomic Energy Relations Organization (in Japanese).

This is a translation of the Japanese article published on July 7, 2023 on International Information Network Analysis (IINA).

Yuki Kobayashi is a Research Fellow at the Sasakawa Peace Foundation.


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