Page 22 - Eastern Europe Outlook 2020
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         • Renewables
Russia will launch a Green Certificate trading system to regulate carbon emissions, but the system is not seen as producing meaningful results in the short- to medium-term, VTB Capital commented on the bill prepared by the Ministry of Economic Development.
As reported by ​bne IntelliNews​, the latest Emissions Gap Report 2019 by the UN Environment Programme (UNEP) generally ​sees few concrete steps in Russia towards emission cutting​ despite the recent ratification of the Paris Agreement, that ​bne IntelliNews ​covered in a feature “​the Cost of Carbon in Russia​”. However, emissions has become a big theme for Russian companies that are keen to improve their​ ​environmental, social and governance (ESG) scores as it is affecting their share price.
The Green Certificate gives the right to confirm that electricity consumed was produced using verified renewable energy sources, and it can only be issued for electricity produced at renewable capacity commissioned after 2024 within the state programme for renewable energy support.
It will not cover electricity produced using waste-to-energy systems or electricity produced at existing large-scale hydro plants, VTBC noted.
Also, the system will be voluntary: such certificates will only be issued after a request from the owner and operator of qualified renewable capacity. The exchange and trading of the certificates will not replace the system of guaranteed return on the investments into renewable capacity.
"The launch of the green certificate system is unlikely to lead to any major impact on profitability, even for the greenest generators, such as Enel Russia," VTBC believes.
The voluntary nature of the system and the mandatory exclusion of certificate sales proceeds from investment repayments, are unlikely to prompt generators to fill the trading platform with a sufficient amount of certificates, the bank argued. "Besides, excluding large-scale hydro capacity from the system limits
      22​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com
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