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decarbonising the power sector and undertaking forestry projects. These account for 59% of total emissions in Russia and can be decarbonised for RUB102.7tn, we estimate. That broadly matches MinEconomy’s RUB88.8tn 60% CO2 reduction programme. Transport remains the most expensive sector to decarbonise, followed by cement and iron ore & steel.
Abatement costs might drive prices. The most substantial price hike to foot the CO2 removal bill is required in the power (28% end-user price increase) and cement (40%) sectors. Decarbonising the oil & gas and M&M sectors would have a minimal effect on product pricing. Full decarbonisation requires annual capex at 5x annual EBITDA for transport, 2-3x for cement/chemicals, 1-1.5x for the power sector and waste, and less than 1x for oil & gas and M&M, keeping the dividend prospects in these sectors the highest in the economy which is going through a green transformation.
Key takeaways. Our research indicates that Russia can halve its emissions using a carbon price of only $30/t. After the quick wins by 2030, the CO2 removal capex is set to rise as decarbonisation activities move away from methane and the power segments. Decarbonisation capex almost universally holds a pro-inflation component to it, and we think that 40-year decarbonisation could add as much as 12% to the real price increase (or a proportionate margin contraction). Household consumption would be the most expensive to decarbonise, with the ICE-to-EV switch and decarbonisation of communal services being the most expensive in the curve in Russia. Forestry projects, though, could turn out to exceed public expectations of the ‘cheapness’ of such projects, while numerous Russian businesses are already relatively carbon competitive compared with international peers.
Your in-depth guide to future environmental capex in Russia. The first edition of this report covers all the topics associated with sectoral decarbonisation. They include capex requirements, EBITDA capacity to foot the bill, footprint comparison to international peers, a summary of the largest emitters and CO2 targets and essential abatement costs by processes.
2.6 Is Russia’s build up of troops on Ukraine’s border a new Cuban Missile crisis?
Russia has clearly been building up forces close to the Ukraine’s border but as bne IntelliNews has reported experts are convinced that Russia will not actually attack. So what is really going on?
This is not the first time that Russia has built up its forces on Ukraine’s border. In April the Russian army also built up its forces on Ukraine’s border in a very public and obvious way that also created a major scare.
That confrontation only ended at the end of April when Russian Defence Minister Sergei Shoigu ordered the men back to barracks at the end of the month.
At the time analysts speculated the gesture was designed to improve Russia’s hand ahead of a one-on-one summit between Russian President Vladimir
18 RUSSIA Country Report December 2021 www.intellinews.com