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26 I Companies & Markets bne June 2021
Russian government, along with all the governments in eastern Europe, has had an additional impetus to take action by the European Union (EU) “green deal” that is due to come into force next year. The EU is a major trade partner for all of the countries in Central and Eastern Europe (CEE) but from 2022 the EU plans to introduce a green duty that will be applicable to any “dirty” product that has been produced using emission-heavy inputs, especially energy. That will put a big dent in bottom lines and governments and companies are currently scrambling to re-engineer themselves to reduce the impact.
As part of these new measures the Russian government introduced its first carbon charge on the island of Sakhalin at the start of this year in a pilot scheme that prices carbon at $50
Lukoil oil spill headed towards the Barents Sea
bne IntelliNews
An oil spill in the Komi Peninsula is four to five-times bigger than initially thought, and may flood into the Barents Sea on Russia’s north-eastern coast if unchecked, environmentalists warned on May 17.
Komi officials declared an emergency after oil spilled out of the Oshskoye field, operated by Russian oil major Lukoil. The oil spread into the soil and local waterways, but was thought to have been contained on land.
Initially Lukoil said 20 tonnes of oil product had spilled, but now it is reported that closer to 90-100 tonnes have leaked, nine tonnes of which have already got into the local Kolva river that empties into the Arctic region’s Barents Sea, officials in the town of Usinsk 1,500 km north-east of Moscow said as cited by the Moscow Times.
If the 100 tonnes figure is confirmed that would make the spill five times larger than last year’s spill by mining giant Norilsk Nickel, then dubbed the Exxon Valdez of Russia.
The energy-rich Komi region witnessed one of the worst
oil spills in Russian history in August 1994, when its ageing pipeline network sprang a leak that was officially said to have totalled 79,000 tonnes, or 585,000 barrels. Independent estimates put the figure at up to 2mn barrels, reports Reuters.
Russia already suffered its worst post-Soviet environmental disaster last year after a power unit belonging to Norilsk Nickel spilled over 20,000 tonnes of oil into rivers in the Pyasino region flowing to the Kara Sea in June 2020, making it one of
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per tonne – a relatively high level compared to what carbon pricing costs have been suggested by other countries in the region – that could be rolled out across the whole country.
Putin has in the past downplayed the risks of climate change, saying that global warming might not be that bad and Russians, who can “spend less on fur coats.” But Putin has changed his tune now and highlighted the Sakhalin scheme during his participation in a climate summit organised by US President Joe Biden in April and reaffirmed Russia’s commitment to fighting climate change. The Russian president has latched on to the climate issues partly because the problems are palpable now and partly because it provides useful geopolitical leverage in Russia’s fraught relations with the West.
An oil spill by Russian oil major Lukoil is five times larger than first feared and headed through local rivers towards the Barents Sea. A previous spill by Norilsk Nickel dumped 20,000 tonnes of oil into the local rivers.
the worst ecological catastrophes in the history of the Arctic region. Comparable to the 37,000-tonne spill of the Exxon Valdez tanker, the spill was declared a federal emergency by the Kremlin and Norilsk was fined $2bn for the accident.
And also in June 2020, a once-in-a-1,000 year snow melt flooded the TGK1 power station near Murmansk, putting two of its hydropower units out of action after they went underwater because of “abnormal water inflow” due to melting snow at a nearby lake.
A few months later an unusual algae bloom off the coast of Kamchatka killed all sea life along several kilometres of coastline in October 2020, which was initially blamed on
a chemical spill, but later ascribed to a change in the water temperature in the sea.
As bne IntelliNews has reported, Russia’s permafrost is melting and temperatures in the Far North are rising twice as fast as elsewhere on the planet. Russia’s changing climate is already starting to have severe consequences for the local environment. Some of Russia’s famously fertile arable land in the south of the country has begun to suffer from "desertisation", although this has not affected grain production yet, which was close to all-time highs in 2020.
The Lukoil spill is the first environmental disaster this year, but the polluted water has been swiftly carried downstream from the Kolva into the connecting Pechora and Usa rivers and is now advancing toward the Barents Sea, environmentalists say.