The map of climate initiatives and climate profiles of companies - an applied tool developed on the initiative of the ESG Alliance companies and designed to present to a wide range of stakeholders the entire "palette" of climate initiatives of Russian business - was presented on July 1, 2024.
Irina Petrunina, Director of the Department for Competition, Energy Efficiency and Environment of the Ministry of Economic Development of the Russian Federation, set the general framework for the discussion and presented a brief overview of the Ministry's activities in terms of climate regulation. Thus, as of today the Carbon Units Register services are exempt from VAT; foreign legal entities can now open accounts in the Carbon Units Register and process transactions with carbon credits; starting June 1, 2024 all project documentation, reports of accredited organizations with conclusions on the results of the project validation and verification of its results are publicly disclosed when registering a climate project. In this regard, ongoing dialogue with business is a priority for the Ministry: "Feedback from business is very important to us in order to respond more quickly to its requests and ensure the successful implementation of climate projects by leading companies, taking into account the interests of the state," noted Irina Petrunina.
Tatyana Romanenkova, Senior Manager of the Climate Initiatives and Carbon Regulation division at SIBUR, shared the company's experience in diversifying the portfolio of climate projects and successfully implementing various mechanisms for using carbon credits. An important area of the company's climate activities is finding buyers and selling carbon credits in foreign markets, in particular, in Turkey and China, where, according to Tatyana, there is interest from potential international partners.
Polyus has been working to reduce emissions for a long time, but the first climate project of the company was registered this year. Darya Grigorieva, Director of Sustainable Development at Polyus, noted that the Alliance's map of climate initiatives makes it possible to demonstrate the company's progress at the earliest stage of creating a climate project, even before its validation and registration that can take a long time.
The agricultural sector's potential to reduce greenhouse gas emissions was also discussed at the presentation. Sergey Kudryashov, Head of Sustainable Development at PhosAgro, spoke about the company's research activities in this area and noted the need to increase demand for low-carbon products, which in turn can increase business interest in climate projects.
Elena Myakotnikova, Chief Sustainability Office at RUSAL, spoke about the company's approach to promoting climate initiatives and appreciated the efforts of the Russian Ministry of Economic Development in terms of improving the quality and transparency of information on climate projects, since the quality and cost of carbon credits as the company's tangible assets directly depend on this.
Discussing the functionality of the new Alliance product, the moderator of the session, Oksana Gogunskaya, General Director of Kontur JSC, the national registry of carbon units, noted that the new service is a relevant tool, useful for the market and complementary to the existing infrastructure for the implementation of climate projects. Oksana encouraged company representatives to more actively share their own plans and achievements at different stages of the implementation of such projects, recording them on the map through the online application form provided by the service.
"The idea that stand behind the project was to create a visually convenient and attractive tool, free and publicly available, which will promote the climate agenda and give users the opportunity to obtain information on the decarbonization efforts of Russian companies in a dynamic and convenient format on a single digital platform," said Alexey Spirin, Director of the Department for Environmental and Climate Risk Management at En+, which leads the ESG Alliance working group on climate agenda, describing the task of the new service.
Vladimir Lukin, partner at Kept (the service developer) and a leading expert in the field of climate, particularly emphasized the growing global trend towards information disclosure and transparency on all ESG components, including climate information. According to him, the map is a tool for creating this kind of “accessible infrastructure” to increase transparency and awareness, which is important for all stakeholders, either the initiator of a climate project, or a future buyer of carbon credits, or a regulator, or a trading platform.
Alexander Kraevoy, Head of the Department of Industrial Engineering and Sustainable Development at RusHydro, also welcomed the introduction of the service for both the energy industry and the market as a whole, noting, among other things, its contribution to the formation of a transparent, efficient and healthy competitive environment for the implementation of climate projects.
The participants also debated on one of the key issues of interest for companies - that of creating clear incentives for companies to engage in climate projects today, in the conditions of the early development of the carbon credits market in our country. The topic of demand for carbon credits was also discussed by the experts.
Maxim Kochetkov, Head of Sustainable Development at Moscow Exchange, emphasized the need to increase demand for carbon credits. "A situation where supply on the market significantly exceeds demand for a long time will most likely force companies to begin abandoning climate projects. To prevent this, it is necessary to conduct "national promotion company for carbon credits", i.e. to transform a ton of CO2 into a liquid and demanded product that is clear for the buyer. And here it is important that the regulator, represented by the Ministry of Economic Development, sets the right vector.”
In this regard, Irina Petrunina shared the Ministry's plans to create factors for demand growth, in particular, the the Ministry of Economic Development is developing a draft resolution that will give an opportunity for any interested party to offset the carbon footprint with carbon credits. "We expect that the new procedure will significantly simplify the circulation of carbon credits and increase demand for them," Irina noted.
The need and importance of increasing the demand was also highlighted by Vladimir Zotov, President of the Association of Waste Recycling Companies "Clever”, an industry association whose members mainly belong to the SME segment. Thus, Vladimir is confident that if the market sees real economic benefits from the climate projects implementation (that should be driven by the growth of demand for carbon credits), then this will become a factor for the further growth of the carbon market in Russia as a whole, in particular, by involving small and medium companies in climate projects, which is not yet a priority for such companies.
A recording of the event is available at the link: https://disk.yandex.ru/i/wkUhdM3tNZ6FlA
