The Battle for the Arctic: How Russia Is Falling Behind in Icebreaker Production

A country that once led the world in building icebreakers now risks being left without a fleet by 2030

In the past three years, Russia has commissioned only one nuclear-powered icebreaker—an alarming drop from the pre-invasion pace of one ship per year. Meanwhile, the country’s existing icebreaker fleet is aging rapidly: at least three vessels are expected to reach the end of their service lives between 2026 and 2027. At this rate, Russia may not have enough operational icebreakers by 2030 to support its ambitions in the Arctic.

Sergey Kagermasov and Anastasia Platonova from the BBC Russian Service use the construction of nuclear icebreakers as a lens to examine how the Kremlin’s plans for Arctic expansion are faltering under the weight of international sanctions and disrupted supply chains.

With editorial permission, we are publishing an excerpt supported by customs data provided by Arctida NGO and expert analysis from Rima Abu Zaalan.

Read the full article at the link.

Straight Ahead: Sanctions

The launch of the Yakutia, a nuclear icebreaker from Project 22220, was personally overseen by President Putin over video call in the fall of 2022. Officials claimed at the time that all foreign components on the vessel had been replaced with domestically produced alternatives.

“Once we achieve our long-awaited victory on the most important fronts for our motherland, we will no longer turn to our so-called Western ‘partners’ for this equipment. They’ve already lost this market,” declared Andrei Buzinov, deputy CEO of the United Shipbuilding Corporation.

Source:VGTRK (All-Russia State Television and Radio Broadcasting Company)

However, customs records obtained by the Arctida NGO tell a different story. In March 2022, the Finnish company Wartsila Solutions—apparently fulfilling pre-war contractual obligations—delivered a shipment of foreign components for both the Yakutia and another icebreaker, the Chukotka. The shipment included Norwegian temperature sensors, Spanish pumps and bearings, voltmeters from the Netherlands, and other equipment.

After Russia launched its full-scale invasion of Ukraine, Wartsila backed out of the contract and withheld delivery of diesel generators and shaft line systems for the two icebreakers. In March, the company published a statement on its website condemning the war, announcing that it had suspended all deliveries and new sales to Russia, and pledged to comply fully with sanctions.

Project 22220’s nuclear icebreakers are being built by the Baltic Shipyard, which has filed lawsuits in Russian courts seeking compensation from Wartsila for damages and independent guarantee costs. However, Wartsila pointed out that the shipyard had signed an arbitration agreement specifying that contractual disputes be resolved by the International Commercial Arbitration Court in Sweden.

Russian courts ruled in favor of the Baltic Shipyard, stating that sanctions imposed by Sweden and Finland—now officially considered “unfriendly” countries by the Kremlin—prevent the shipyard from participating in arbitration proceedings in Sweden. Wartsila appealed both cases up to the cassation level, but was rejected each time. When contacted by the BBC, Wartsila declined to comment on the ongoing litigation.

In the meantime, the Baltic Shipyard appears to have turned to intermediaries. According to Import Genius, a commercial firm that tracks global customs data, Spanish valves and fittings destined for the Yakutia were shipped in 2023 by a Turkish company called Novatme. These shipments were also confirmed by the Arctida NGO The recipient of record was a Russian legal entity named “Okan.”

When contacted by the BBC, Novatme denied ever supplying valves or fittings to Okan or signing any related contracts. “Any statement implying otherwise is false and misleading,” the company emphasized.

Novatme further stated that its accountant and customs broker could not identify the shipment listed in the Import Genius data. “We do not understand the nature or origin of this information,” the company said in a written response.

Source:GettyImages

The Baltic Shipyard came under U.S. sanctions back in 2014 as part of the United Shipbuilding Corporation. It wasn’t until March 15, 2022, that the shipyard was hit with EU sanctions. Yet just a couple weeks later — on March 29 — $78,000 worth of Spanish pumps for the icebreaker Chukotka were delivered to Russia under an earlier contract. A year later, in the summer of 2023, Italian windshield wipers for the same icebreaker were imported via intermediaries: a Turkish company acting on behalf of the St. Petersburg company “Baltika Group.” That shipment cost 10.7 million rubles.

Foreign parts were also used to build the icebreaker Ural. In August 2022, the Croatian company Adria Winch brought German spare parts into Russia for that ship’s mooring winch. The Baltic Shipyard paid $3,000 for that delivery.

Because of sanctions, supply chains have had to be restructured by the factories’ subcontractors. For example, the I. I. Afrikantov Experimental Machine-Building Design Bureau, which builds reactors for icebreakers, now sources spare parts from China, according to the Arctida NGO.

Electrical equipment for Project 22220 icebreakers is supplied by VNIIR‑Progress. That organization is under sanctions by several countries, including the U.S., so it acquires equipment through various intermediaries. In the first quarter of 2024, customs data reviewed by Arctida show that the organization purchased microprocessors from the American company Altera (then controlled by Intel) via Hong Kong. In 2023, VNIIR‑Progress bought navigation receiver spare parts manufactured by the Irish company Taoglas, the U.S. company Samtec, and the Japanese firm Hirose Electric.

Taoglas told the BBC that after Russia invaded Ukraine, the company immediately imposed sanctions against all Russian clients, including banning sales to VNIIR‑Progress. “We do not approve of the use of our products in unauthorized activities,” Taoglas stressed.

A representative from Altera told the BBC that the company “complies with all applicable export and sanctions laws in the countries where it operates.”

In 2023, the Russian state-owned enterprise Atomflot — which operates nuclear-powered icebreakers — was added to the U.S. sanctions list. In spring 2025, sanctions from the UK halted the tow of the floating dock Kuzey Star, built at a Turkish shipyard, intended for Project 22220 icebreakers. The shipyard was also sanctioned by the U.S. The dock ended up stranded in shallow water in the Mediterranean. Because of this, in 2025 the icebreaker ka had to sail extra nautical miles from Murmansk to Saint Petersburg to undergo its scheduled maintenance.

Source:GettyImages

Sanctions have also affected the atomic icebreaker Project “Leader” overseen by the Zvezda shipyard in Russia’s Far East. That yard is owned by a consortium led by state company Rosneft. The U.S. added Zvezda to its sanctions list in early 2025. The same year, Kommersant reported that construction deadlines for the Leader were slipping and that the project was becoming more expensive. For instance, the main massive hull blocks were supposed to be supplied by the Ukrainian plant Energomashspetsstal in Kramatorsk. Due to the war, that became impossible — earlier in 2022, Russian rockets struck the plant. The Russian Defense Ministry claimed it had destroyed a large ammunition depot there.

Historically, about 60% of the world’s icebreakers have been built at Finnish shipyards, and Finnish firms are responsible for designing about 80% of these vessels. Roughly one-third of Russia’s active icebreakers were built in Finland, including two nuclear-powered ones. After the initial sanctions, Russia sought alternative suppliers. For example, a South Korean yard was contracted to build three icebreaker-tankers — but due to sanctions, these too were never delivered.

Sanctions targeting Arctic development in Russia first began in 2014. The most painful were those on Arctic mineral extraction projects, according to Mikhail Komin. For example, both the U.S. and the EU banned the export, re-export, or transfer of goods that Russia could use to explore for or extract oil in the Arctic.

“Before 2014, international cooperation in the Arctic was somewhat active—limited, but present. Americans, Brits, and French all participated. Since 2014, that cooperation has been greatly reduced. Russia has plenty of resources in its Arctic region and on the continental shelf, but extracting them is quite difficult. The share of these hard-to-access reserves is rising. That means that eventually, the resources concentrated in the Arctic zone will have to be used much more intensively. But the technologies for that don’t exist domestically. The West is cutting Russia off from those technologies,” Komin explained.

Sanctions are the primary cause of the problems faced by Russia’s icebreaker fleet, confirms Nurlan Aliyev, senior researcher at the College of Europe in Natolin, Poland. They are gradually distancing Russia from the system of international division of labor built up over decades.

Now the Kremlin claims that by 2025 icebreaker construction has become less dependent on imports, and that the share of domestically produced components exceeds 60%. For example, Rima Abu Zaalan of Arctida told the BBC that the steering and propeller columns—essential for maneuverability and safety—were mostly bought in Finland. Now, however, they are made at facilities such as the Zvezdochka ship repair center and factories in the Konar Group. The Zvezdochka was sanctioned by the U.S. in 2016 and by the EU in 2022.

Electric motors, power plants, and their components on nuclear icebreakers are Russian-made, Abu Zaalan explains. On diesel icebreakers, efforts are also being made to use domestic equipment — though these projects were always more dependent from the start on German and Finnish gear. Towing winches were also among the equipment previously imported from Europe. After the first sanctions following the annexation of Crimea, those winches began to be made in Russia.

Propaganda abounds in claiming that shipbuilders are replacing foreign equipment with Russian alternatives. However, there has been no public independent assessment of how these domestic components compare in quality to foreign analogues.

Problems also arise in servicing foreign-made equipment. Supplier company representatives often are needed to launch and configure vessels: adapting equipment to specific conditions, training staff, etc. Foreign specialists did not travel to set up gear on the Ural because of sanctions, said Alexey Rakhmanov, head of the United Shipbuilding Corporation in spring 2022. He didn’t specify which companies, but media noted that, for example, fire safety equipment for the Ural was supplied by Britain’s Survitec Group.

From Staff Shortages to Corruption

Sanctions have pushed the Baltic Shipyard to the brink of possible bankruptcy, according to its 2024 audit report. For more than three years, its debts have exceeded the value of its assets. Its management nonetheless hopes that its status as a strategic enterprise will allow it to continue operating.

The fall in the ruble has also hurt the shipyard’s finances: after the war and sanctions began, the ruble has been volatile, and for much of 2022 it was very weak.

Contracts for foreign components are typically denominated in euros, says Rima Abu Zaalan. Due to the ruble’s decline, the Baltic Shipyard found contracts like those for the Sibir icebreaker and Ural became “planned as unprofitable.” Margins under the original estimates were thin. On those projects, insurance and bank guarantees — obligations for a bank to compensate a client for losses if the contractor fails to fulfill a contract — also added to costs.

Construction of icebreakers is also slowed by a shortage of qualified labor. Rosstat data show a historic low unemployment rate: as of June 2025, unemployment was 2.2%. This suggests there is little slack in the labor market.

“It’s being built — the competencies are there — but not at the pace one would like to see. The core issue for the Zvezda shipyard right now, in regard to the Leader project, is the lack of skilled personnel,” said Rosatom deputy director Vyacheslav Ruksha in 2025.

Source:Arctic today

Minister for Arctic Development Alexey Chekunkov echoed the same concern.

This has created a domino effect. The cost of icebreakers has increased sharply compared to the first five ships in Project 22220, admitted by Vladimir Panov, vice‑chair of the State Commission for Arctic Development in 2025.

Because of high costs, tariffs for icebreaker services along the Northern Sea Route have become uncompetitive. Rosatom has even proposed introducing an Arctic investment fee for shippers from 2028 to fund icebreaker construction. Kommersant reported in 2024 that the corporation also suggested a fixed tariff for icebreaker escort services to be indexed each year. These proposals have so far not been adopted.

High-interest loans also play a role. These stem from a high Central Bank rate, the regulator’s tool to slow inflation.

“Let’s not pretend, the problem lies with the key interest rate. When the first government directives came to build the third and fourth icebreakers, I personally supported a financing model of 50‑50 (half paid by the state budget, half by the shipyards). But in the current financial system, such borrowed money simply isn’t available,” said Ruksha in 2025.

Source:PortNews

Shipbuilding in general is highly dependent on borrowed funds, auditors of the Baltic Shipyard said in their 2024 report. That is due to the nature of the work: high overhead, large purchases of ship components and materials, and long production cycles.

That the shipyards have accumulated debt is blamed by auditors on "legal problems and economic imbalances arising in earlier periods." These loans are expensive, and government contracts are not always priced clearly. As a result, the financial situation of the enterprises has worsened; debt has increased across the industry.

Corruption is another obstacle facing Russia’s nuclear icebreaker program. For example, in 2020 a fraud case was brought by the Kirov‑Energomash plant against Alexander Kharitov, founder of the Baltic Shipyard’s hydraulic equipment division. He was accused of trying to steal tens of millions of rubles during construction of the ka. Kharitov denied the charges. The case was dropped due to the statute of limitations.

Delivery dates for icebreakers may also be delayed by bureaucracy, notes researcher Mikhail Komin.

“Because Russian bureaucracy is authoritarian, it doesn’t work very well. Corruption, delays, changes in leadership — it’s the standard set you see everywhere in the Russian system. It’s exactly the same everywhere,” Komin believes.

There are even questions about equipment at the Saint Petersburg shipyards. In 2023, Andrey Kostin, head of state bank VTB, visited these yards and said, “The machines are working — not all of them, thank goodness, but many — from 1932.” They were taken from Germany as reparations.

Read the full article by Sergey Kagermasov and Anastasia Platonova for the BBC Russian Service → hear.

Cover photo: Horsepower driven nucelar icebreaker Yamal on the North Pole. GettyImages

Authors:

Rima Abu Zaalan

Project Manager of Arctida