Page 119 - RusRPTOct21

emissions, in which case the Ministry Believes the carbon intensity of the Pricing Zone I (which is dominated by gas and nuclear generation) would be used; this is bullish scenario that would lead to a 40% reduction of exports to Finland, RUB7bn of losses from export reduction and RUB5.5-6.5bn of payments for emissions – all of which implies a RUB13bn profit hit, per the Ministry.
According to the Interfax source, the Ministry of Energy also notes that a mechanism of free bilateral contracts, existing in the Russian energy market, could be used as a tool for confirming the purchase of electricity from a specific producer (in particular, a renewable energy producer). To support Russian exporters, the Ministry of Energy proposes the creation of a system of green certificates – similar to I-REC – and the construction of an emission verification system that could be recognised by the EU. If the Russian Federation and the EU fail to reach agreement, the Ministry of Energy proposes considering the introduction of quotas and taxes on greenhouse gas emissions for importers, similar to EU, with the funds toe used to modernise Russian emitters of greenhouse gases.
Gas price gains partly driven by poor renewables performance. Gas prices in Europe have continued to soar, rising almost to $900/kcm as of Wednesday morning. The situation was exacerbated by still air in the north of Europe, which lowered the share of wind in the electricity mix: for the UK it fell to 4.9% (vs. the 18% average in 2020). In Germany, the share of wind in the electricity mix fell w/w last week to 10% (vs. 26% average for 2020 and 5 p.p.elow seasonal average).
The EU and the US are to present the Global Methane Pledge, Euractiv reports. The document sets the target to reduce human-caused methane emissions by at least 30% (from 2020 levels) by 2030. Per Euractiv, the US and EU areoth to propose laws this year to restrict methane emissions, which might affect O&G companies (Oil and Gas – ESG Weekly, of 22 July).
Gazprom is to sign an agreement with the Russian government on hydrogen and the decarbonisation of industry and transport in Russia, Interfax writes. Gazprom is to be responsible for the 2025 roadmap creation, while the government is to provide a favourable environment for implementing the roadmap measures. In our view, this might mean that Gazprom will be an important part of the emerging hydrogen economy.
Gazprom Neft plans to increase hydrogen production at its Moscow refinery over time, Interfax reports, citing GPN’s head of strategy and innovations. The hydrogen mighte supplied for Moscow’s hydrogen vehicle
119 RUSSIA Country Report October 2021 www.intellinews.com