Multilateral Approaches to the Nuclear Fuel Cycle and other proposals

1. Multilateral Approaches to the Nuclear Fuel Cycle and other proposals Tariq Rauf Head, Verification and Security Policy Coordination (Scientific Secretary of the Expert Group on Multilateral Nuclear Approaches (MNA) and of the 50th IAEA General Conference (Special Event): New Framework for the Utilization of Nuclear Energy in the 21st Century: Assurance of Supply and Non-Proliferation) Vienna, 6 February 2007

2. Past Efforts Initiatives on multilateral approaches to the nuclear fuel cycle are not new: • Baruch Plan: proposed an International Atomic Development Authority – 1946 • Atoms for Peace: speech to UNGA by US President Eisenhower – 1953 – proposed an IAEA • IAEA Statute (1956): Article III.B.2 and Article XII.A.5 provide for Agency control over excess special fissionable materials • IAEA study project on regional nuclear fuel cycle centres (RNFC) – 1975 to 1977 • Committee on International Plutonium Storage (IPS) – 1978 – 1982 • International Fuel Cycle Evaluation Programme (INFCE) – 1977 to 1980 • United Nations Conference for the Promotion of International Co-operation in the Peaceful Uses of Nuclear Energy (UNCPICPUNE) - 1987 • Committee on Assurances of Supply (CAS) – 1980 to 1987 • International Symposium on Nuclear Fuel and Reactor Strategies: Adjusting to New Realities (1997) • Technical, Economic and Institutional Aspects of Regional Spent Fuel Storage Facilities (RSFSF) – 2003 IAEA TecDoc

3. Why revisit this option? Back to the Future • End of the Cold War has resulted in rise of regional political security agendas • Possibility of “break out” from the NPT by non-nuclear-weapon States (NNWS) with advanced nuclear fuel cycle technology and/or stocks of enriched uranium or separated plutonium – intentions cannot be verified • Increased threat of nuclear and/or radiological terrorism • Rise of clandestine nuclear supply networks – individuals and entities in nearly 40 countries

4. Current status (as of Feb. 2007) • 435 nuclear power plants • 29 under construction • expansion centered in Far East and South Asia

5. France 78% Belgium 57% Rep. Korea 45% Switzerland 32% Japan 29% USA 19% China 2% Russia 16% Nuclear share of electricity (2005)

6. Medium-term Projections

7. IAEA Expert Group Report:INFCIRC/640 In identifying and providing an analysis of issues and options, the MNA Group focused on activities and facilities involving significant proliferation risks: • Uranium enrichment • Spent fuel reprocessing • Spent fuel repositories (final disposal) • Spent fuel storage (intermediate)

8. Method of Analysis The MNA Group adopted a template to analyse each of the technologies - uranium enrichment, fuel reprocessing, spent fuel disposal, and storage: Type I: Assurances of services not involving ownership of facilities: a)Suppliers provide additional assurances of supply b)International consortium of governments c)IAEA-related arrangements Type II: Conversion of existing national facilities to multinational Type III: Construction of new joint facilities MNA options span the whole spectrum between existing market mechanisms (of private ownership) and intergovernmental-ownership

9. Assessment of the Options Two primary factors dominate all assessments of multilateral nuclear approaches: • Assurance of supply and services – measured by the associated incentives (e.g supplier guarantees); the economic benefits that would be gained by participating countries; and better political and public acceptance for such projects • Assurance of non-proliferation – measured by the various proliferation risks associated with a nuclear facility, whether national or multilateral

10. Five Suggested Approaches - 1 1. Reinforcing existing commercial market mechanismson a case-by-case basis through long-term contracts and transparent suppliers’ arrangements with government backing. Examples would be: fuel leasing and fuel take-back offers, commercial offers to store and dispose of spent fuel, as well as commercial fuel banks.

11. Five Suggested Approaches - 2 2. Developing and implementing international supply guaranteeswith IAEA participation. Different models should be investigated, notably with the IAEA as guarantorof service supplies, e.g. as administrator of a fuel bank.

12. Five Suggested Approaches - 3 3. Promoting voluntary conversion ofexisting facilities to MNAs, and pursuing them as confidence-building measures, with the participation of NPT non-nuclear-weapon States and nuclear-weapon States, and non-NPT States.

13. Five Suggested Approaches - 4 4. Creating, through voluntary agreements and contracts, multinational, and in particular regional, MNAs for new facilitiesbased on joint ownership, drawing rights or co-management for front-end and back-end nuclear facilities, such as uranium enrichment; fuel reprocessing; disposal and storage of spent fuel (and combinations thereof). Integrated nuclear power parks would also serve this objective.

14. Five Suggested Approaches - 5 5. The scenario of a further expansion of nuclear energy around the world might call for the development of a nuclear fuel cycle with stronger multilateral arrangements– by region or by continent - and for broader cooperation, involving the IAEA and the international community.

15. 2005 NPT Review Conference Argentina, Austria, Australia, Belgium, Canada, France, Hungary, Indonesia, Iran, Italy, Japan, Luxembourg (for EU), Malaysia, Mexico, New Zealand, Norway, Korea (RoK), Russian Federation, Singapore, Slovenia, South Africa, Spain, Switzerland, Turkey, UK, USA – some 45 States made supportive comments on MNAs in one form or another

16. Russia: International Nuclear Fuel Cycle Centres In January 2006, Russia's President Vladimir Putin proposed the creation of a system of international nuclear fuel cycle centres (INFCC) under a "Global Nuclear Power Infrastructure (GNPI)" to provide nuclear fuel cycle services, including uranium enrichment, on a non-discriminatory basis and under the supervision of the IAEA – (IUEC Angarsk – International Uranium Enrichment Centre, January 2007)

17. USA: GNEP (Feb. 2006) The Global Nuclear Energy Partnership (GNEP) proposed by the US to develop advanced nuclear power technologies and a fuel services programme to supply developing nations with reliable access to nuclear fuel in exchange for a commitment to forego the development of uranium enrichment and plutonium reprocessing technologies

18. URANIUM ENRICHMENT INDUSTRY The four commercial uranium enrichment companies – AREVA, TENEX, URENCO and USEC – through the World Nuclear Association tabled a report in May 2006, “Ensuring Security of Supply of the International Fuel Cycle” representing the position of a 28-member panel of nuclear industry experts, for an industry-based backup supply mechanism

19. CONCEPT FOR RELIABLE ACCESSTO NUCLEAR FUEL In June 2006, six countries with commercial uranium enrichment activities – France, Germany, Netherlands, Russian Federation, UK and US - under a US initiative, tabled a proposal to offer ‘reliable access’ to nuclear fuel to States opting to rely on the international market for nuclear fuel and not to have domestic enrichment activities

20. JAPAN: STANDBY ASSURANCE In September 2006, Japan proposed to establish a system called the "IAEA Standby Arrangements System for the Assurance of Nuclear Fuel Supply" under IAEA auspices, that incorporates both an information system to contribute to the prevention of the occurrence of market failure and the back-up feature for supply assurance proposed in the six-country proposal for reliable access

21. UK: ENRICHMENT BOND In September 2006, the United Kingdom, in the context of the supply assurance envisaged in the six-country scheme, proposed an “Enrichment Bond” – this would enable prior consent or ‘de-flagging’ for provision of enrichment services for qualifying recipient States – Germany and Netherlands have associated themselves with this initiative

22. NUCLEAR THREAT INITIATIVE:IAEA FUEL RESERVE Also in September 2006, the Nuclear Threat Initiative – a US NGO - proposed to set up a stockpile of low-enriched uranium, under the Agency's auspices, to serve as a last-resort fuel reserve for countries that have elected not to build a national uranium enrichment programme: NTI offered a challenge grant of US$ 50M to be matched by US$ 100M to be raised by IAEA / Member States (in funds or nuclear material)

23. GERMAN FOREIGN MINISTER: INTERNATIONAL ENRICHMENT CENTRE Furthermore, in September 2006, Federal Foreign Minister Frank-Walter Steinmeier (FR Germany) proposed the creation of an international uranium enrichment facility - operated by the IAEA - at an extraterritorial (international) site (estimated operational date ± 10 years)

24. IAEA SPECIAL EVENT AT GC 50 Chair’s summary: … recent proposals for assuring supplies of uranium-based nuclear fuel can be seen as one stage in a broader, longer-term development of a multilateral framework that could encompass assurance of supply mechanisms for both natural and low enriched uranium and nuclear fuel, as well as spent fuel management … establishing a fully-developed, multilateral framework that is equitable and accessible to all users of nuclear energy, acting in accordance with agreed nuclear non-proliferation norms, will be a complex endeavour that would likely require a progressively phased approach

25. INDICATIVE QUESTIONS • 1. What is the “purpose” to be served? • 2. What is to be “assured”? • 3. What are the modalities? • 4. What would be the “release criteria”? • 5. How is “international” defined? • 6. Does “under the control of the IAEA” mean ownership, management, oversight or merely under IAEA safeguards? • 7. How is “non-discriminatory” defined? • 8. What would be the proposed “global infrastructure”? • 9. How would the proposed international centre(s) be staffed? • 10. What role is envisaged for the IAEA?

26. INDICATIVE QUESTIONS • What is the “purpose” to be served? - dual-objective, i.e. to address: (a) the possible consequences of interruptions of supply of nuclear fuel due to political considerations that might dissuade countries from initiating or expanding nuclear power programmes; and (b) the vulnerabilities that create incentives for building new national enrichment and reprocessing capabilities. Thus, an assurance of supply mechanism would be envisaged solely as a back-up measure to the operation of the commercial market, for those States that want to make use of it, in order to assure supply in instances of interruption for political reasons.

27. INDICATIVE QUESTIONS • What is to be “assured”? - supplies of natural uranium and low enriched uranium stocks, and still others focused on assurances of the supply of nuclear fuel itself, through the establishment of a series of interlocking arrangements among major suppliers; and a reserve of low enriched uranium

28. INDICATIVE QUESTIONS • What are the modalities? - possible modalities could include: a virtual reserve of natural and low enriched uranium, based on binding contractual agreements for the supply of such material, plus parallel binding commitments/assurances of fuel fabrication services ... while an actual (physical) bank of natural or low enriched uranium could be established, it would be impractical for technical and economic reasons to have an actual bank of nuclear fuel assemblies, given the different types of reactor designs and the many variants of nuclear fuel required for them – in this case, the physical bank of nuclear material would need to be supplemented by parallel binding commitments/assurances of fuel fabrication services

29. INDICATIVE QUESTIONS • What would be the “release criteria”? - in accordance with the IAEA Statute, an Agency-administered assurance mechanism would have to be available to all Member States in a non-discriminatory manner - certain release criteria would need to be defined and agreed upon, either by the IAEA Board of Governors or the supply consortium - the application of the release mechanism would need to be demonstrably non-political and based on objective criteria

30. OTHER PROPOSALS: “CRITERIA-BASED APPROACH” E & R technology transfer restraint • NPT member in good standing = implementation of strengthened safeguards (CSA + AP) • Nuclear safety and security • UNSCR 1540 • Nuclear export controls • Other: political/strategic considerations, rationality of nuclear energy choice, support of MNAs

31. DIRECTOR GENERAL New Framework and Assurance of Supply Mechanisms At the November 2006 Board, the DG stated: “A Special Event was held during the General Conference on a new framework for the utilization of nuclear energy, to facilitate discussion of recent proposals on mechanisms for the assurance of supply of nuclear fuel. As I have said before, the assurance of supply of nuclear fuel, to be acceptable to States, should be formulated in a manner that is equitable and accessible to all users of nuclear energy. The Secretariat is now studying issues related to the modalities and criteria for possible assurance mechanisms. The Secretariat hopes to bring for consideration by the Board a report on "options" for assurances of supply by the middle of next year.”