Page 18 - RusRPTMay21

0.283tCO2/t of production, along with the water circulation system,
etc.;
· for aluminium production - the emissions have to be lower than
1.5tCO2/t and electricity consumption during electrolysis needs to be
below 16.1MWh;
· nuclear, wind, solar energy and small hydro projects (with capacity
below 25MW) are considered green without any additional criteria.
At the same time, the document envisages transitional projects, which include using mine methane and associated petroleum gas, or coal processing to obtain cleaner fuel. Existing production facilities can be considered transitional projects if there is:
· an improvement in resource and energy efficiency of at least 20%; AND
· a decrease in the discharge or emission of pollutants or greenhouse gases of at least 20%; AND
· a transition to a water circulation system.
VTB believes that, along with the arising climate risks to different aspects of companies' operations (which could affect their access to foreign sales markets, ability to attract international financing, the valuation of their business and the sustainability of profits in the long term), the demand for green financing is only likely to increase. This is why a distinct and defined taxonomy, that is generally in line with similar documents from the world’s largest economies, is an important step in setting up such a type of financing.
At the same time, the key question remains: what sort of subsidies or privileges would such financing get on the Russian capital market. Once this issue has been resolved, whether it is a reduction in the risk weight for green financing instruments (as proposed by the Head of VTB, Andrey Kostin), or in the form of additional tax credits, or some other measure, the market would get a definite impetus for the complete formation of such a scheme.
2.6 Russia passes peak oil
Russian oil production might never recover to pre-coronavirus levels, the country’s Energy Ministry has forecast, according to the Kommersant business paper.
In a strategy document outlining prospects for Russia’s critical oil and gas industry, the government said its “base case” — or most likely — scenario, is that Russia’s oil production will never again hit the record levels recorded in 2019.
In the last full year before the pandemic, Russia produced 560mn tons of oil — equivalent to 11.3mn barrels a day. But output dropped for the first time in
18 RUSSIA Country Report May 2021 www.intellinews.com