China and Russia Dominate Global Nuclear Trade

Global competition between the West and the rest of the world is playing out in many ways, including in the energy sector. The nuclear industry has long been one such battleground. Unfortunately, the US and Europe have not performed very well when it comes to winning tenders in developing countries.

In late May 2024, Uzbekistan signed an agreement with Russia for the sanctioned Russian State Atomic Energy Corporation (Rosatom) to build a nuclear power plant in Uzbekistan. It will be the first nuclear plant in Central Asia, providing zero-emission electricity to the energy-hungry country. It will also give Moscow new influence in a region that has slipped out of Moscow’s sphere of influence since the Ukrainian war. Russia’s success is not entirely established; at least for now, neighboring Kazakhstan has rejected Russian advances. Astana is considering four options: China, Russia, South Korea and France, and the issue will be voted on in a national referendum this fall.

Russia’s advance in the energy race with the West was not inevitable; it was only made possible by a self-destructive U.S. nuclear policy. Most of the world knows what the U.S. is ignoring: nuclear power is necessary to fight climate change, and despite popular misconceptions, it remains one of the greenest and safest forms of energy. Now this ignorance presents America’s adversaries with a significant geopolitical opportunity.

Russia, through Rosatom, remains the world leader in reactor construction. According to the Global Nuclear Strategy report, as of July 2023, Russia had 24 reactors in operation; seven others under construction: China, India, Turkey, Egypt, Bangladesh, Iran, and Slovakia. By comparison, the United States had zero reactors under construction.

Russia dominates the nuclear industry in many areas beyond just reactors. It also has the world’s largest uranium conversion and enrichment industries in 2020, accounting for 38% and 46% of international capacity, respectively. This also makes Russia a major fuel exporter. Russia exported more than $1 billion in nuclear energy-related products from February 2022 to 2024.

Two of the countries where Russia is building nuclear power plants, Turkey and Slovakia, are NATO members, and they are not the only Western nations ostensibly committed to containing the Kremlin while supporting Russian nuclear dominance.

As my colleague Wesley A. Hill has written, Russia-instigated geopolitical turmoil in Africa, which Russia is using to acquire former French uranium assets, contributed to Europe doubling its imports of Russian uranium in 2023. The United States similarly remained dependent on Russian nuclear exports even after the Ukrainian war resumed in 2022. The United States continued to import Russian nuclear fuel from the same entities sanctioned by the White House until May 14, 2024, more than two years after Russia’s invasion of Ukraine began.

Russia is not the only country that has overtaken the United States. China is also far ahead of the United States in the nuclear power industry. China’s nuclear industry is domestically focused, and as of July 2023, 23 nuclear power plants are under construction in China. This is due to the increasing demand for energy as China continues to develop its economy. The United States is building one nuclear power plant. While China refines its nuclear power production process, the last plant built in the United States was seven years late and $17 billion over budget, a testament to the United States’ complex permitting and environmental review system.

China has also begun using this expertise to supply nuclear reactors overseas. China National Nuclear Corporation and China Guangnuo Nuclear Corporation developed a third-generation reactor called Hualong One, which began operating in Fuqing in 2021. China began construction of the Chashma 5 nuclear power plant in Pakistan in 2023, which will use Hualong One. These actions contribute to China’s ability to build infrastructure and expand its influence overseas.

The US nuclear industry was once the envy of the world, with 112 reactors in operation in 1990, putting the US on the path to carbon neutrality much sooner than currently projected. Thirty-four years later, the US has lost nearly one-third of its operating reactors, few new reactors are being built, and the average lifespan of a reactor is decades over. If nothing is done to improve the situation, in the next 10 to 15 years, a large number of reactors will have to be retired as they reach the end of their operational lifespan, and as a result, the US will have to deal with the disappearance of about 20% of its power capacity.

Despite these obstacles, change is finally coming. Public attitudes toward nuclear power are shifting positively among Democrats, Independents, and Republicans. U.S. officials are now working with the Export-Import Bank, the U.S. International Development Finance Corporation, and small modular reactor developers to win contracts in countries such as Bulgaria, Ghana, Indonesia, Kazakhstan, and the Philippines.

In Congress, the House of Representatives passed the Nuclear Energy Promotion Act, which would create more jobs at the Nuclear Regulatory Commission and ease regulatory hurdles by lowering application fees. It would also incentivize innovation in nuclear reactors by awarding cash prizes. As of this writing, the bill has yet to be acted on by the Senate.

U.S. companies such as General Atomics and Bechtel also stand to benefit if barriers to U.S. nuclear development are removed. The International Atomic Energy Agency estimates that global nuclear capacity will grow from 371 gigawatts in 2022 to 890 gigawatts by 2050. Exporting U.S. nuclear energy hardware and expertise could amount to more than $1 trillion in business by that point, according to the Nuclear Energy Institute.

Nuclear energy is at a tipping point as global powers recognize its critical role in fighting climate change and unleashing economic power. In the United States, the Senate should pass and President Biden should sign the Nuclear Energy Promotion Act to revitalize the U.S. domestic nuclear sector for domestic and overseas projects. Continuing to prioritize SMRs through the EIB and USIDFC is also long overdue. Failure to act now would not only be a missed economic opportunity for the U.S. nuclear enterprise, but also a major geopolitical defeat as more countries become energy dependent on Russia and China during the green transition.