Gazprom Deputy Chairman Aksyutin: 'Solar panel produced in China is comparable to the emissions from coal combustion'
VIP speakers from Moscow differed in their estimates of the losses of exporters: from 1 billion euros to 4 trillion euros by 2050, if nothing is done
'The EU unconditionally relies on renewable energy sources, we are not against it, but in technologically justified situations! In the meantime, in Germany, blackouts have become more frequent, and as they say in science, three times is no longer an accident," Oleg Aksyutin, the deputy chairman of the Gazprom Management Board for Innovations, sharply criticised the “green” strategy of switching to alternative sources of generation. The economic consequences of the tightening of carbon regulation for Russian exporters were the main topic of the discussion at the Tatarstan Petrochemical Forum 2021 on 31 August. VIP speakers from Moscow differed in their estimates of the losses of exporters: if the Ministry of Industry and Trade estimates them at $1 billion, then the head of Sberbank, German Gref, is more pessimistic — $4 trillion until 2050.
In search of a new paradigm for the development of fuel and energy sector
The EU's “green” strategy for decarbonising the fuel and energy complex and the upcoming introduction of cross-border carbon tax for exporters from 2026 do not cease to bother the Russian business community. After the debates at the federal discussion platforms, this topic again became one of the central ones, but this time at the Tatarstan Petrochemical Forum in Kazan. The point of view on the change in global environmental agenda and on Russia's counter actions was expressed mainly by federal VIP guests, among whom there were statesmen, large financial and industrial businesses, and representatives of energy departments of the CIS countries. However, the main angle of the speeches was aimed at finding optimal solutions for the implementation of the “green” agenda. Actually, the very definition of the topic required this. “The decision of the European Union on decarbonisation and new paradigm for the development of the fuel and energy sector” — this is how the organisers defined the problems of the discussion.
“All international companies in the oil and gas sector, under the threat of introducing cross-border carbon regulation, have adopted corporate programmes and set specific goals for reducing greenhouse gas emissions and implementing various compensating measures. Reducing greenhouse gas emissions, creating a system of reliable monitoring of emissions and implementing climate projects are the main ones on the environmental agenda," Tatarstan President Rustam Minnikhanov reminded, referring the audience to the latest important events that broke the Russian fuel and energy sector.
We are talking about the upcoming introduction of cross-border carbon tax, which is planned by the EU from 2023 for the first four exporting industries. As you know, Russia has ratified the Paris Climate Agreement, having committed itself to achieving the parameters of carbon dioxide emissions with specific indicators. The reverse side of these agreements is the introduction by the EU countries of the cross-border carbon tax, the rate of which will correspond to the accumulated carbon footprint in the production of goods.
Among the products that are subject to the tax, there are no products of oil production and petrochemistry yet. But the process of decarbonisation, which means paying the cross-border carbon tax, is not far off. According to Rustam Minnikhanov, Tatarstan, as one of the largest Russian centres in the field of production and processing of crude oil, is already making every effort to fulfill the tasks defined by the head of the state.
Kazakhstan will introduce its own carbon tax to avoid paying to the EU
Kazakhstan strictly adheres to the course of decarbonisation, allowing no doubt that the EU's “green” strategy may be suspended. In his speech, the minister of energy of Kazakhstan, Nurlan Nogayev, spoke in detail about the programme goals for decarbonisation of the fuel and energy sector, which will allow achieving carbon neutrality by 2050. In this, Kazakhstan went further than the rest, proposing to introduce an internal carbon tax.
“In addition, the introduction of an internal carbon tax to reduce consumption, changes in export and import duties, as well as the creation of a carbon fund are being worked out. These funds will be used for the implementation of climate projects in Kazakhstan. This will help to avoid paying the cross-border carbon tax," he said. Nogaev added that a ban on associated petroleum gas flaring has already been introduced, which will reduce harmful carbon dioxide emissions. Kazakhstan is not particularly afraid of the systematic tightening of carbon regulation.”
But Kazakhstan likes projects in the field of renewable energy. If now its share in energy mix is 3%, then by 2030 it is planned to increase the share to 15%. By this time, Kazakhstan is going to produce 130 billion kWh.
A billion euros — so much can be collected from Russian exports
Deputy Minister of Industry and Trade of Russia Mikhail Ivanov believes that in order to achieve carbon neutrality, Russian exporting companies will have to invest a lot on modernisation, and the state is ready to support through the mechanism of subsidising the interest rate on “green” loans and bonds. “Yesterday, the submission period for these purposes within the framework of the pilot project was completed," he said. However, he did not name the amount of funds requested by the businesses, since “applications have not yet been processed”. Later, he added that the budget of the pilot programe is still small, making it clear that not everyone can get it.
In his speech, he reminded the chronology of the recent events that shook the Russian fuel and energy sector. “The European Commission of July 14 presented the Green Deal plan, which assumes the transition to carbon-free economy by 2050. According to the plans, by 2030, the volume of CO2 emissions must be reduced by 55% from the level of emissions in 1999. To this end, it is planned to introduce a mechanism for cross-border carbon regulation: imported goods with a high level of carbon capacity will be charged when imported into the European Union.
The launch of the mechanism is planned from 2026. The share of exports of industrial goods from Russia to the EU amounted to about 22% in 2020, or $24 billion. According to the ministry's estimates, the largest share of non-primary exports is made up of non-ferrous metallurgy, chemical industry, and ferrous metallurgy, and some of the products are subject to cross-border carbon regulation. The main consumers of chemical products are Estonia and Finland.
“We have calculated the potential costs that may occur in the event of the introduction of the cross-border carbon tax. According to our calculations, at a rate of 53 euros — the cost of a tonne of CO2 equivalent on the European stock exchange — the volume of losses is equal to 500 million euros. If we are talking about the years 2030-2035, experts estimate that the rate on CO2 emissions will almost double. We see that almost a billion euros is the amount of potential tax that can be collected from Russian exports. Provided that we have taken the current level of exports as a base," Ivanov predicts.
The head of Sberbank, German Gref, was more categorical: “The world has begun to move from words to deeds. Decarbonisation is no longer a question of 'if', but 'when', in the speed of transformation.” According to him, as a result of falling demand for carbon fuel, exports will be reduced by 20%, and taking into account the carbon tax, its losses may amount to up to $4 trillion by 2050.
Gazprom: Russia's energy balance is close to neutrality due to gas
“The EU unconditionally relies on renewable energy sources, we are not against it, but in technologically justified situations! In the meantime, in Germany, blackouts have become more frequent, and as they say in science, three times is no longer an accident," Oleg Aksyutin, the deputy chairman of the Gazprom Management Board for Innovations, sharply criticised the 'green' strategy of switching to alternative sources of generation, claiming that renewable generation has become the basis for energy energy of Germany.”
He believes that there is no need to blindly follow the EU requirements.
“It is necessary to be careful with the extension of the requirements of one importer to the Russian national system of greenhouse gas emissions. This will lead to an increase in the cost of goods and services in Russia," he warned.
Aksyutin believes that it is necessary to verify Russian climate projects in the EU to reduce greenhouse gas emissions.
“The carbon footprint of renewable energy is equal to zero, although we know that this is not the case!” he exclaimed. “The solar panel produced in China is comparable to the emissions from coal combustion. But now it's zero?!” he was indignant.