Analysis: Nuclear Power and International Trade: Trade policy for a net-zero energy system

Trade can result in cumulative gains that lower costs and improve productivity for the nuclear power industry.

Neil Swanson Trade Policy Adviser

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This report examines how trade policy could help to reduce the costs of nuclear power. This will contribute towards the commitment to treble nuclear energy capacity made by more than 20 countries, including Sweden, at the UN’s latest climate meeting COP 28.

Neil Swanson, why did the National Board of Trade investigate this issue?

The National Board of Trade’s mission is to facilitate free and sustainable trade and climate change is a priority for us. Nuclear power can assist in the transition away from fossil fuel use and thus contribute to the climate transition. Furthermore, international trade is important for the nuclear power industry in the construction of new plants, the maintenance of existing facilities and for nuclear fuels for energy generation. For example, Sweden imports enriched uranium, components for reactors and uses the services of skilled persons from other countries.

You suggest a list of policy recommendations, please give some examples.

First, the tariffs on imports of specialist nuclear equipment should be removed. Although these tariffs are not particularly high, they unnecessarily increase the costs of production and development of new nuclear facilities.

A second recommendation is to review how the rules affecting the cross-border movement of materials and products for the nuclear industry are implemented. There is potential to reduce the differences in export licensing procedures and transportation regulations and thus make trade easier. The first priority is of course a safe system that prevents accidents and prevents nuclear technologies falling into the wrong hands, so any changes should not be at the expense of these objectives.

Finally, there is a lot of innovation in relation to small modular reactors and here trade policy could help by encouraging regulatory cooperation and convergence as well as promoting international standardisation. These actions could help prevent trade barriers from occurring that would otherwise negatively impact the development of global market. Freer international trade has the potential to improve efficiency, reduce costs, achieve economies of scale, and promote innovation.

What difference can trade policy make?

Trade policy is unlikely to be the decisive factor in commercial and policy decisions to build new nuclear power. However, trade is an important part of the puzzle as reducing administrative work, regulatory differences, and frictions and tariffs at the border can result in cumulative gains that lower costs and improve productivity. Furthermore, many countries are reliant on imports of nuclear materials, products and skilled persons for the maintenance and operation of their nuclear power plants. The importance of a well-functioning trade system should not be overlooked.

Who needs to act on your recommendations?

The EU and its member states can act to streamline and harmonise procedures for the transportation of nuclear material. Member states could cooperate on reducing differences in export licensing procedures. A reduction of tariffs can also be addressed at the EU level. There are several potential avenues for international regulatory cooperation including existing International Atomic Energy Agency initiatives.