Uranium conversion and enrichment activities: a highly strategic area for the European Union

The European Union (EU) is simultaneously pursuing two objectives: the decarbonisation of its economy and the strengthening of its strategic autonomy to increase the resilience of its supplies and value chains. Uninterrupted, reliable and competitive access to low-carbon electricity will play a highly strategic role in these twin ambitions. A contribution of the European nuclear industry remains essential for this purpose. For the EU, having a domestic supply chain of the nuclear fuel cycle, in particular those related to uranium conversion and enrichment, is a key strategic interest.

Nuclear power plays an important part in the EU’s goals of decarbonisation and industrial resilience

Nuclear power today accounts for almost 25% of the EU’s electricity production, or approximately about half of its low-carbon component. However, the decarbonisation of the European economy implies a significant increase in electricity consumption by 2050 (between +35% and 150% compared to 2018 depending on the sources¹). This massive electrification process will require secure, reliable and competitive low-carbon supply to ensure its resilience.

The recent sharp rise in electricity prices, mostly due to volatile gas prices, has reminded public opinion that the EU remains vulnerable to energy imports. By 2050, Europe’s electricity mix will need to become less dependent on imported fossil fuels in order to increase its decarbonisation while strengthening energy sovereignty.

The European Commission acknowledges that nuclear power will be part of the EU’s future decarbonised electricity mix, alongside renewable energies.

All technologies of the nuclear fuel cycle – mining technologies, uranium transformation, reactors, fuel, back-end solutions – are mastered in Europe. Therefore, strengthening the European nuclear industry will enable the European Union to better cope with international contingencies. Furthermore, recent substantial investment of the European nuclear industry in modern, safe and adaptable facilities have given the EU a technological leadership that is both rooted in its territory and open to the world.

Uranium conversion and enrichment facilities are strategic issues in the nuclear value chain

After the extraction of uranium, its conversion and enrichment are key steps in providing suitable fuel for current and future nuclear power plants. As such, these two activities require special attention due to their strategic nature for the security of supply of the EU and, ultimately, its energy independence and security.

The enriched uranium produced by Orano supplies low-carbon energy to nearly 90 million households each year, the equivalent of France, Germany and the UK combined. Orano’s conversion capacity supplies nearly 180 million households, the equivalent of 80% of the EU + UK. These figures illustrate how important our industrial sites are in order to achieve the goals of low-carbon electricity production in Europe, as well as their strategic interest for the EU security of supply.

The decision of some of our competitors (Russia and China) to close their domestic conversion and enrichment markets to foreign players illustrates the highly strategic nature of the nuclear front end.

Import limitation measures have been put in place in some countries, such as the United States, where quotas on the maximum volume of Russian enriched uranium were set at 20% of the US market between 2011 and 2020, and currently at 13% from 2021 to 2040. These limitations are meant to protect the domestic industry, which is reduced to one enrichment plant. Meanwhile, the EU and its four enrichment facilities remain open to foreign competition².

Under the authority of the European Commission, the Euratom Supply Agency (ESA) is responsible for the implementation of a common policy for the supply of uranium ore and nuclear materials³. ESA has created a market observatory to provide a forward-looking view of flows. The Agency also validates supply contracts through a co-signature process.

In October 2020, it launched a working group on High-Assay Low-Enriched Uranium (HALEU), a type of fuel required for certain types of advanced reactors, in order to explore commercial and industrial options for the development of a European production capacity.

In its latest annual report in 2020, ESA stresses the importance of diversifying sources of supply in the nuclear fuel cycle. While 95% of the natural uranium in European facilities comes from six different countries and the EU demand for uranium is expected to fall by 12% over the next ten years, the Agency is concerned about the dependence of some European operators on a single foreign supplier for fuel fabrication. Generally speaking, ESA considers that security of supply is guaranteed when two alternative suppliers exist at each stage of the nuclear fuel cycle value chain.

Unfortunately, the ESA’s principles are not always enforced in practice. Awareness of the strategic importance of conversion and enrichment activities for the European Union may therefore need to be increased in order to place European players and their foreign competitors on an equal footing on EU territory.

Orano, a major player in the nuclear fuel cycle, committed to promote the EU’s energy independence and security

Orano invested massively-more than 5 billion euros over the last 10 years – to renew its industrial conversion and enrichment facilities (respectively the Philippe Coste plant, inaugurated in 2018, and the Georges Besse II plant inaugurated in 2010). These new plants secure a European footprint for conversion and enrichment for the next forty years. They enable us to offer our customers the most efficient industrial installations in the world, in compliance with the most demanding safety standards, while limiting the environmental footprint of these facilities.

Orano is the worldwide leader in natural uranium conversion with 25% of the installed capacity. Philippe Coste conversion which was commissioned end of 2018 is performing in its ramp-up program, which will lead to a total production capacity around 15,000 tU per year by 2023 to supply Urenco and Orano enrichment facilities.

Orano is also committed to developing new activities such as the production of non-nuclear stable isotopes. The expertise acquired for nearly 60 years in the transformation, conversion and enrichment of uranium will enable the opening of a stable isotopes laboratory by 2023 and increase European sovereignty in this domain. These isotopes are used in various applications in the medical field (diagnosis and treatment of cancers), in the industrial sector (increasing the performance of lasers) and in the field of fundamental research (quantum computing).

In order to consolidate these unique European competences in the long term, the European Union should guarantee a level playing field in the international market to its own nuclear industry. This is of strategic interest for the European energy market and, therefore, for the European Union as a whole.

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1 In the European Commission’s long-term strategy, the EU’s final energy consumption decreases from 1,639 Mtoe in 2016 to 1,200 Mtoe in 2050, but all scenarios predict an increase in electricity consumption.

2 30% of the European market is held by the Russian company Tenex/TVEL

3 Article 52 of the Euratom Treaty