Page 120 - RusRPTOct21

fleet. However, the company pointed out that CO2 capture and storage near densely-populated areas is a problem, as it could be out of line with regulations to inject CO2 into aquifers near a large city. We think this remark provides a cross read thatlue hydrogen production will likely emerge near existing O&G fields, where CO2 cane stored in hydrocarbon producing deposits.
The Head of the Russian State Reserves Committee estimates the amount of CO2 that might be injected for increased oil recovery at 18bcm, according to Interfax. There have been no geological studies on this in Russia yet and no dedicated CO2 storage haseen created so far.
Chevron is to increase by threefold its decarbonisation capex, to $10bny 2028, of which $2bn is to be spent on lowering the carbon intensity of its operations. The company also targets the production of biomethane (40,000mmbtu), renewable diesel, sustainable aviation fuel (100kbbl/d) and hydrogen (150kt/a) and for volumes of carbon capture (25mnt/a). Separately, Chevron also entered into an agreement with Delta Airlines and Google to track emission levels from sustainable aviation fuel, as part of the R&D to perfect production technology.
9.1.11 Metallurgy & mining sector news
New 6% MET rate likely toe pegged to global commodity prices. The new tax mechanism developed by Russia’s Ministry of Finance (MinFin) would raise MET to 6% for iron ore,ase metals, fertilizers and coking coal, as well as peg the new tax to global commodity prices. If the new tax is not high enough to bring in the RUB250bn budgeted for by MinFin for 2022, an additional profit-based tax could be applied, Interfax reports. The new MET and tax regulations should not apply to Russian producers of precious metals and diamonds. ALROSA is already paying 8% of its revenue in MET, while Russian gold producers are paying 6% of theirs. Given the high level of operating leverage in the mining industry, we believe small and junior mining companies would be affected the most by a higher MET rate.
9.1.12 Transport sector news
In September, the Russian railway market transported 106mnt of cargo, a 1% y/y increase.
The market remains strong, with the highest volumes since the GFC 2008. Of this 1% total y/y growth, coal contributed 1pp (due to the surge in prices and soaring global demand), and 2pp was added by oil (due to the easing OPEC+ quotas). Meanwhile, 2pp decline came from grain (highase of 2020) and
120 RUSSIA Country Report October 2021 www.intellinews.com