Gazprombank expects emissions trading to begin in Russia at the end of 2022

Test trading of emission quotas in Russia may begin at the end of 2022, Roman Panov, First Vice President of Gazprombank, told Vedomosti.

“We expect that by the end of 2022 the entire regulatory framework will be created, key criteria will be determined, the key participants in this process will confirm their readiness, and we expect to conduct the first trade transactions in test mode by the end of 2022,” he said.

Panov explained that the bank is currently participating in an experiment that is being conducted by the Sakhalin Oblast. According to him, the exchange principle of quotas trading today has very strict legal requirements and its application does not yet have a regulatory framework, therefore, at the first stage, it is planned to use an over-the-counter mechanism – Gazprombank’s Electronic Trading Platform.

The first vice-president of Gazprombank recalled that earlier the bank had signed a corresponding agreement with the Sakhalin Region. As part of it, Gazprombank participates in a working group that will develop a package of regional regulations necessary to launch trading, Panov explained. According to him, a federal law is now being prepared to approve an experiment on trading in carbon units in the Sakhalin region and approaches to its implementation.

Panov added that it is difficult for Gazprombank to assess the profitability of this business now, but in the future, “a significant volume of financial transactions” can be expected in the emissions trading market.

“We are participating in an experiment to assess the prospects. Carbon trading in Russia will develop. Participation in this experiment should answer the question of cost effectiveness. Assessing the scale of the market, we understand that this is a significant volume of financial transactions, ”he said.

As previously reported by Vedomosti, in mid-April this year, the Minister of Economic Development Maxim Reshetnikov said that carbon regulation in Russia will start working in 2022. Its basic principles will be enshrined in the Law on Limiting Greenhouse Gas Emissions.

It is assumed that large enterprises will be obliged to submit annual reports on greenhouse gas emissions to regulatory authorities: first, those whose annual emissions are more than 150,000 tons of CO2 (carbon dioxide) equivalent, and after 2024 – more than 50,000 tons. by the state, one enterprise will be able to resell emission quotas to another, if necessary.

Greener factories (producing fewer CO2 emissions) will be able to earn on allowances, selling them to those enterprises whose emissions are significantly higher than the established limits. Another way out of the situation for polluting enterprises that emit large amounts of greenhouse gases will be to pay the government for excess emissions in the form of a carbon tax. This is the approach that is used today in Europe (in particular, in Finland, Norway, Sweden and Switzerland, it exceeds $ 50 per 1 ton of CO2-equivalent).

The first pilot region to introduce and trade carbon credits will be the Sakhalin Oblast. The roadmap for conducting a corresponding experiment in the region was approved in January 2021 by Deputy Prime Minister Victoria Abramchenko. Its goal is to achieve carbon neutrality by 2025, i.e., to reduce to zero the difference between greenhouse gas emissions and their absorption, taking into account the capabilities of the region’s ecosystem. In April, representatives of the regional authorities of the Nizhny Novgorod and Kaliningrad regions announced their readiness to start trading in emission quotas.



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