The State Duma yesterday, immediately in the second and third readings, adopted a government bill on limiting greenhouse gas emissions in the Russian Federation. Business associations intend to formally criticize the document, stating that it lacks real regulatory instruments, mechanisms for verifying the reliability of companies’ carbon reporting, as well as any economic incentives for the implementation of climate projects.
The bill adopted yesterday by the State Duma in the second and third readings introduces the concept of greenhouse gases (GHG) and carbon units arising from the implementation of voluntary climate projects. Companies will be able to implement such projects to reduce emissions or increase GHG absorption. In addition, the largest issuers will have to start reporting on carbon emissions (with a volume of up to 150 thousand tons of CO2-equivalent – no later than 2024, then it will be necessary for all enterprises with an emission volume of more than 50 thousand tons, for more details see “Kommersant” from The 21st of April).
Recall that this bill has been developed since the fall of 2017. Previous versions of it contained proposals for a “carbon price” – in the form of emission quotas and carbon trading or over-quota payments. However, after agreeing with the companies in the final version of the bill, there were no such norms left.
Vladimir Burmatov, head of the Duma’s environmental committee, announced yesterday that “the adoption of the document will not only create conditions for fulfilling international obligations under the Paris Agreement, but will also protect national producers.” The deputy noted that domestic producers will be able to present the carbon units put into circulation to their foreign partners for offset when exporting products. Nikolai Nikolayev, Chairman of the State Duma Committee on Natural Resources, Property and Land Relations, noted that the concept of a climate project is emerging in Russian legislation, which will allow, for example, to develop initiatives for the reuse of resources or the transition to technologies that reduce emissions of harmful substances.
However, business associations perceive the adopted document somewhat differently. “The draft law practically does not contain regulatory instruments. In addition, without verification of the emission data provided by enterprises, their reliability will tend to zero. As a result, the bill, in fact, loses all meaning. We spoke about this at a meeting in the government, but the text of the draft has not changed, ”Anton Danilov-Danilyan, co-chairman of Business Russia, told Kommersant.
Sergey Alekseev, chairman of the Chamber of Commerce and Industry Committee on Nature Management and Ecology, believes that “the bill does not bring one step closer to solving the President’s task to ensure strict control over GHG emissions and their reduction to lower levels than in the EU.” In his opinion, “we will face the absence of any reliable data on emissions and no economic incentives for the implementation of projects.” “Until amendments are made, this law will not be filled with concrete financial and quantitative meaning,” he told Kommersant. According to Kommersant’s information, both business associations are soon planning to come up with an official position on the need to finalize the bill.
Experts also agree with entrepreneurs. Oleg Pluzhnikov, director of the Center for Green Economy and Climate at VEB.RF, notes that the lack of regulations ensuring verification of company emissions, as well as validation of project documents, “actually discredits the very idea of creating a regulatory system based on reliable data.”