Page 11 - FSUOGM Week 34 2021

FSUOGM ENERGY TRANSITION FSUOGM

Sechin calls for Russian carbon trading

system to be internationally recognised

RUSSIA ROSNEFT CEO Igor Sechin has called on the advantage over domestic companies that must
Kremlin to ensure that the EU acknowledges pay carbon tax. It is also aimed at encouraging
Moscow wants to Russia’s own CO2 emissions quota system suppliers outside the EU to take action against
collect more carbon when calculating how much carbon tax Rus- climate change.
taxes itself rather than sian exporters must pay on their supplies to Russia is also putting pressure on its neigh-
hand them over to the bloc. Sechin made the appeal in a letter to bouring states to adopt carbon regulation.
Brussels. Russian President Vladimir Putin, warning Economic Development Minister Maksim
that the border taxes could inflict far greater Reshetnikov said on August 31 that Russia
damage to the Russian economy than interna- would push to consolidate the carbon regula-
tional sanctions. tion of all members of the Eurasian Economic
Russia is introducing its own, voluntary car- Union (EEU), which also include Kazakhstan,
bon trading system, partly in response to the Kyrgyzstan, Belarus and Armenia. Again, this
EU’s decision to apply a carbon tax to imports attempt at harmonising the rules and standards
starting in 2026. The system allows Russian com- is aimed at ensuring companies across the trad-
panies to offset the emissions associated with ing bloc operate on a level playing field.
their products by investing in carbon absorption “In our view, launching a system for carbon
projects in Russia’s vast forests. trading is the most effective way to accelerate
Moscow hopes that this system will be taken decarbonisation and, along with the EU border
into account when the EU calculates its bor- carbon adjustments, the proposals for the joint
der taxes, meaning that more of the resulting response of members of the EEU seem logical, as
receipts go to Russia’s coffers rather than those EEU integration for the energy sector has been
of Brussels. approved,” VTB Capital (VTBC) said in a recent
Sechin, who is one of the most influential fig- research note.
ures in Russia’s power circles, went even further, In Russia, so far only the Sakhalin region has
urging the Kremlin to seek to have Russia put adopted a mandatory carbon trading system,
on a list of countries that are exempt from the charging companies RUB1,500-2,000 for every
carbon tax because of the greenhouse gas (GHG) tonne of CO2 that they emit. But other provinces
absorbing capacity of their ecosystems. including Bashkiria have also expressed interest
Russia estimates that EU border taxes could in such a scheme.
affect $7.6bn of annual Russian exports, includ- Kazakhstan has also introduced a national
ing iron ore, aluminium, pipes, electricity and carbon trading system, setting the tax at $1.2 per
cement. It could also later be expanded to cover tonne of CO2 as of April, while providing a cer-
Russian oil and gas exports, which are the gov- tain quota of free carbon permits.
ernment's largest revenue-earners. “Were similar rules to be imposed for Russian
The rationale behind the EU’s taxation pol- gencos, the immediate negative effect on Russian
icy is that it will ensure that third-party suppli- utilities would likely be milder that it might have
ers to the bloc’s markets do not have an unfair been,” VTBC said. ™

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