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ministry plans to submit this draft for public discussion.
Business representatives consider the proposal to be overly severe and premature. This opinion is shared by UC Rusal, according to its representative, while Severstal noted that it was verifying emissions and used international standards, which excludes the possibility of any violation. InterRAO highlighted that it had been verifying emissions since 2018 and, as before, including them into its annual reports.
Since the approval of the Law on Emissions, further steps have been undertaken to work out all the details of the climate regulations. The Sakhalin experiment got its CO2 price of RUB150-2,000/t as a fine for excess emissions, while large emitters in Russia are to be obliged to pay fines if they do not report their emissions properly, according to the Ministry of Economic Development’s proposal. This is further confirmation that climate-related risks are going to feed into the financials and affect profitability.
On Tuesday 24 August, TASS published an interview with the Minister for Economic Development, Maksim Reshetnikov. According to Reshetnikov, the annual value of exports that would be exposed to the EU carbon tax is $7.6bn and reporting is to be introduced from 2023 (with actual payments from 2026), while the mechanism has a number of details that have not yet been specified in the draft (and which are key to assessing the development in more detail). He also noted the need for legislation to i) accept that large hydro and nuclear are green and ii) account for CO2 absorption and carbon capture. The minister noted that a strategy of low-carbon, long-term development in Russia was being discussed, with four scenarios under assessment (inertial, base, intensive, aggressive), and the possibility of achieving carbon neutrality was being analysed. According to the minister, it is important to introduce an indicative price of CO2 gradually and to break it down into different sectors. Thus, it is necessary to launch carbon reporting, and introducing CO2 costs with proper regulation can speed up many processes (such as modernising communal services). Elsewhere, Interfax reported that the Ministry of Energy expected the legislation on low carbon certificates to be approved in the autumn. According to the Deputy Minister of Energy, Pavel Snikkars, the supply of low carbon energy is 452bn kWh, while the demand from exporters is half of this volume, and retail demand is still shaping up (which could add about 10%).
Kommersant has reported details of the latest draft of the low-carbon, long-term strategy in Russia through 2050 from the Ministry for
129 RUSSIA Country Report September 2021 www.intellinews.com