10.21.2020

No plans for carbon tax in Russia – minister

MOSCOW. Oct 21 (Interfax) – Russia has no plans to introduce a carbon tax, Maxim Reshetnikov, the economic development minister, told Interfax.

“We are very attentive towards these measures. In the current economic situation it is vital for us to prevent cost inflation. Demand is stagnating, with demand limited both for exports and at home, and manufacturers have nowhere to shift additional costs. So we are taking a tough line on any proposals to raise tariffs and shift that to the consumer – this is the essence of our economic policy. The regulatory guillotine is also nothing other than an attempt to lower the regulatory costs of business. In this respect a carbon tax right now would be totally inappropriate,” he said, commenting on the outcome of Monday’s session of the Foreign Investment Advisory Council, where carbon regulation in Russia was actively discussed.

Foreign investors during the meeting raised the issue of carbon regulation in Russia against the backdrop of the European Union’s plans to introduce additional levies on goods produced by other countries in connection with CO2 emissions.

“We are taking the softer option. We need to put a normal monitoring system in place. We will make all mechanisms available to a business that wants to do this voluntarily, so they could have certificates to show to Europe, which are recognized there as green and are verified, so they wouldn’t be making those demands of us,” he said.

 “Also, a common system for monitoring the climate agenda might be important. Some say our economy is carbon intensive, but it isn’t really. If we look at what’s been done in the last 20-25 years where modernizing the power sector is concerned, all the capacity supply agreements, development of nuclear and hydro-power, and renewables then we have a very good mix. Also a lot of progress has been made [with energy intensity] in housing and utilities, we can see how far we have come. Yes, there are still some issues for us to deal with. We also need to adequately assess the absorption capacity of our forests. From our point of view and from the point of view of very many experts, this is not being assessed adequately. When the absorption capacity of forests in the Pskov region is for some reason several times lower than that of neighboring countries, including Poland, no explanation is given,” Reshetnikov said.

Russian businesses are already raising the issue of support for companies that might be affected by the EU’s planned carbon border tax. The authorities are in dialog with them, but it is difficult for now to discuss any details, he said.

“Russian companies are raising the same issue, that they night suffer from the carbon tax [that the EU is planning]. But it is hard to respond to that when you don’t have the details or the mechanics of the tax on the EC’s part. Let’s wait until it comes, then we’ll respond. We have questions as to the extent to which it is going to comply with WTO rules, we are waiting for specifics from our partners.

The tax is supposed to be introduced in 2023 and could amount to $30 per tonne of CO2, but analysts at BCG reckon it might be imposed as early as the end of 2021 or beginning of 2022. Experts say it will mostly affect oil refining and coke in industries, and the mining industry. Inactivity over the introduction of rigorous carbon legislation and emissions charges could mean Russian exporters will have to pay between $3 billion and $6 billion annually when the EU imposes the carbon tax in 2023, Rusnano chief Anatoly Chubais said at a Border Carbon Adjustments conference on September 3.

This article appeared on the FastMail News website at https://www.fastmailnews.com/page/detailnews/no-plans-for-carbon-tax-in-russia-minister/85353

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