Can Russia go Green?

Russia's potential for climate mitigation is enormous. In 2020, the Food and Agriculture Organisation (FAO) estimated that Russia has the largest forest area of any nation, accounting for 20 per cent of the world's forests.

According to FairPlanet's calculations, Russia ranks fifth in the world regarding greenhouse gas emissions after China, the US, India, and the European Union. About 80 per cent of the country's emissions come from the energy sector, including burning fossil fuels and leakage. 

It is worth mentioning the emissions provoked by Russia's war with Ukraine. According to a study by the International Initiative on Greenhouse Gas Accounting of War (IGGAW), cumulative CO2 emissions due to the hostilities amounted to 170 million tonnes in the first two years of the conflict.

"This exceeds the annual emissions of a highly industrialised country like The Netherlands, putting 90 million new petrol cars on the road or building 260 coal-fired power units of 200 MW each," the researchers said.

Among the contributors to emissions are fuel use by Russian and Ukrainian military transport, burst shells, fires, construction of fortifications, increased fuel consumption by civil aviation due to the need for additional detours around the battlefield, and so on.

The potential for mitigation in Russia is high. Still, the country has long suffered an acute problem with illegal tree felling in Siberia and the Far East region, threatening to sabotage its carbon sink.

Russian President Vladimir Putin vowed that the country would become carbon neutral by 2060. At COP29 late last year, Prime Minister Mikhail Mishustin said, "We focus on improving energy efficiency, developing electric transport, and introducing modern solutions in agriculture and forestry."

He added that a unified system for assessing the quality of climate projects is necessary. At the same time, according to the Strategy of socio-economic development of the Russian Federation with low greenhouse gas emissions until 2050, by 2050, emissions must be reduced by 80 per cent compared to 1990. That is, from 3.113 million tonnes of CO2 equivalent to 630 million tonnes (after the absorption). 

At COP29, Mishustin said Russia had already reduced its emissions by more than 50 per cent from 1990.

A lacklustre carbon credit scene

Russian legislation on climate projects came into effect in 2022. The law describes itself as "a set of measures to reduce (prevent) greenhouse gas emissions or increase the absorption of greenhouse gases," and carbon credits as a "verified result of implementing a climate project, expressed in the mass of greenhouse gases equivalent to 1 ton of CO2." A project earns a carbon credit when it absorbs or reduces one ton of carbon.

Despite the measures, there have been only 48 carbon credit initiatives in the country - just one project for every two regions. 

FairPlanet analysis identifies two main types of projects in Russia. Representatives of the first type retrofit their industrial equipment. A typical project of this kind is the replacement of several coal-fired boiler units with gas-fired ones at a thermal power plant in Vladivostok. Indeed, switching from coal to gas, according to various data, reduces emissions by 2-2.5 times.

However, many Russian plants have regularly transitioned from coal to gas since the Soviet era, so critics do not regard these as innovative or new under the green plans.

Another type of carbon credit initiative focuses on enhancing carbon sinks, as demonstrated by Sibur, Russia’s largest oil and gas chemical company. The company has committed to expanding afforestation efforts across three regions in the country. For instance, 28 hectares of forest will be planted in Tatarstan, 60 hectares in the Tyumen Region, and nearly 110 hectares in the Nizhny Novgorod Region.

Tatyana Romanenkova, Senior Manager of Climate Initiatives and Carbon Regulation at Sibur, speaking at one of the sessions of the Russian pavilion at COP29, noted that her company, for example, sold carbon credits of its climate projects to Cypriot company Qiwi for $7 per unit. She said that now, part of such transactions of Russian companies occur directly between the seller and buyer of carbon units and part - on various Russian exchange platforms.

Tatyana Larionova, chief of staff of the Russian Union of Industrialists and Entrepreneurs Climate Policy Committee, explained to FairPlanet that the deal's price is usually not advertised. But Romanenkova's $7 per carbon unit is generally a "relevant" figure for Russia. At the same time, in the global markets, "we can find everything from quality units for $10-$20 to insanely expensive ones for $100," said Larionova.

Behind the Sakhalin region model

Irina Petrunina, Director of the Department of Competition, Energy Efficiency and Ecology of the Ministry of Economic Development of Russia, said at the same session that Russia is experimenting to reach carbon neutrality in the entire region of Sakhalin, which is located on an island of the same name in the Pacific Ocean.

The Sakhalin Oblast government wants to achieve zero emissions by the end of 2025. The plan is to eliminate almost 2 million tonnes of annual net emissions (emissions remaining after absorption by forests and the ocean). Still, the natural carbon sink already absorbs about 90 per cent of all current emissions in the region. Therefore, the task does not look complicated.

Vyacheslav Alenkov, Vice Prime Minister of the Sakhalin Oblast government, presented the project in detail at COP29. According to him, 680,000 tonnes of emissions are to be reduced through a programme of gasification of the region, 75,000 tonnes from developing electricity and gas-powered transportation in the area, 30,000 tonnes through landfill management, 215,000 from developing alternative energy sources and 160,000 tonnes from improving energy efficiency technologies in homes and infrastructure, and the same amount of emissions should be removed by companies in the region.

Companies can also claim they have carbon-neutral projects by purchasing carbon credits from climate projects in other regions at a low price despite continued pollution. However, Alenkov does not see this as a problem, as it is an opportunity to develop Russia's carbon unit market. 

What must change to make russia’s Climate projects green

Mikhail Yulkin, the General Director of the consultancy Carbon Lab and a climate expert, told FairPlanet that Russian legislation does not require climate projects to meet international standards. 

Yulkin points out that most initiatives related to energy efficiency, transitioning from one fossil fuel to another, or reducing emissions without switching to renewable energy sources can be considered climate projects only in low-income countries. 

In December 2023, the Monetary Authority of Singapore and McKinsey & Company presented a working paper outlining how to accelerate the early decommissioning of coal plants in Asia, primarily in Southeast Asian countries, which, according to many studies, are heavily dependent on coal-fired generation. The International Energy Agency (IEA) points out that In 2023, "coal generated half of the region’s electricity, accounting for 80 per cent of power sector emissions."

This document indicates that switching to renewable energy sources and natural gas or nuclear power can be used to phase out coal plants and create new carbon credits. 

As for the climate experiment in the Sakhalin region, Yulkin notes that it is a forested region with a slight difference between emissions and absorption of greenhouse gases. Therefore, the goal should be to reduce harmful emissions. Russia also has steppe regions, and to achieve carbon neutrality by 2060, the forested areas must show negative dynamics. 

He also points out that the penalties for excessive emissions in the Sakhalin region are not high enough. In addition to the quota, there is a small fine of $10 per ton of carbon, so many don’t even bother purchasing carbon credits from other regions to offset.

Dmitry Lisitsyn, ex-head of the environmental organisation Sakhalin Environmental Watch, which shut down after being accused of being a "foreign agent," told FairPlanet that the Sakhalin experiment is likely a lip service without much substance. 

In fact, says Lisitsyn, gas flaring is still common at almost every oil and gas field and onshore oil and gas processing complex. This outdated practice has caused significant emissions of harmful substances into the atmosphere.

Image by Andrey Kigay.