Page 98 - RusRPTJan22

or the weighted average price according to the data of 20 trading days if they are traded on the exchange). In order to credit / debit carbon credits from an account, it is proposed to charge no more than RUB5 for each unit.
The operator of the register has yet to be approved, but according to the draft legislation, it could be a joint enterprise of Moscow Exchange, VEB and Gazprombank.
Establishing who is going to operate the register, as well as the rules related to carbon units, are some of the steps necessary to create the base for climate projects and to account for emissions in Russia correctly. We note the proposed cost of a carbon unit from which the commission is calculated: the draft mentions RUB2,000 per carbon unit (unless there is trading on the exchange.
We remind readers that the recently approved Sakhalin trading experiment has a CO2 price of RUB150-2,000/t ($2-27/t) if the is exceeded, while MinEconomy’s preliminary version of the low-carbon strategy mentioned a possible RUB500-700/t price after 2030.
However, the World Bank estimates that Russia needs a price of $44-130/t (from 2025) to reach carbon neutrality, while the IMF puts it at $50/t. We estimate that a CO2 price of $30/t would make it possible to decarbonise 50% of GHG emissions in Russia.
Novatek signs MOU on decarbonisation with RWE. According to this MOU, Novatek is to supply low-carbon blue ammonia and hydrogen to RWE Supply and Trading from its Obsky GCC. To recap, at the first stage, Obsky GCC plans to produce more than 2mnt/a of ammonia and some 120kt/a of hydrogen. Given that the hydrogen economy is currently only developing, securing the supply of a plant that solely produces ammonia and hydrogen, and is already going to launch in the mid-2020s, might be one of investors’ greater concerns, we think. This news shows that the demand could be there, which is positive. The MOU additionally envisages deeper cooperation on LNG (higher spot supplies to RWE and possibly volumes from Arctic LNG).
The government and Gazprom Neft might develop a system of incentives for CCUS projects. The governments of Russia and of the Orenburg region, together with Gazprom Neft, are to develop measures for incentivising carbon capture, utilisation and storage projects, Interfax reports. This follows the instructions given by the Russian president at a sectoral meeting in October. There is also going to be a study of transporting CO2 by pipeline. The deadline is 1 April 2022. To recap, there are currently no incentive schemes for CCUS in Russia (analogous to 45Q in the US), nor are there any technological standards for it. Gazprom Neft has implemented a CO2 injection project in Serbia and its management has already stated that the Orenburg region is a candidate for the geological storage of CO2 in Russia.
MinEconomy wants to mandate verification of GHG emissions reporting
98 RUSSIA Country Report January 2022 www.intellinews.com