First Deputy Minister of Economic Development Ilya Torosov considers it necessary to introduce its own system of charging for carbon in Russia in order to save funds for decarbonization within the country. According to Mr. Torosov, the issue of introducing a tax on carbon emissions is now on the agenda for discussion with business and government authorities. He also admitted that carbon pricing could only be extended to select industries.
On October 1, 2023, the EU introduced the Carbon Border Adjustment Mechanism (CBAM). It stipulates that importers of steel, aluminum, fertilisers, cement, electricity and hydrogen must report its carbon footprint quarterly. In addition, from 2026, suppliers will be required to pay for emissions generated during the production of goods through the purchase of special certificates.
Ilya Torosov in conversation with RBC noted that in response to the European transboundary mechanism, carbon regulation began to be actively implemented in China, India, Turkey and Kazakhstan. “It is strategically wrong to hope that the European cross-border carbon regulation mechanism will not affect us, since in the new geopolitical conditions trade relations between Russia and the EU countries are reduced to a minimum. Therefore, we proceed from the same considerations: why pay taxes to the budgets of other countries when you can replenish your own and use it for the same decarbonization?” – he pointed out.
According to the First Deputy Minister of Economic Development of Russia, the issue of carbon pricing is now on the agenda for discussion with business and government authorities. Ilya Torosov pointed out that in order to implement the carbon regulation project, it is necessary to organize the accounting of greenhouse gas emissions from all sectors of the economy, therefore decarbonization of the economy “is impossible without the participation of business.” He also did not rule out that the carbon price could be extended only to certain industries or linked to certain products, but there are no specific conditions yet.
The carbon quota format is currently being tested on Sakhalin as part of an experiment that will last until 2028. “Determining a carbon price will begin with developing a pricing framework in 2026 to shape regulatory options. The draft plan provides for a gradual increase in load, effective redistribution of funds and combination with incentive mechanisms for industrial modernization,” said Mr. Torosov.
At the same time, the deputy minister emphasized that there are currently no plans to expand the Sakhalin experiment, since the authorities “have enough data from this region.” “Based on the island’s experience, we will subsequently make a decision on extending such regulation to the federal level,” he concluded.
At the end of January, the Ministry of Economy presented a draft resolution tightening the rules for assessing greenhouse gas emissions by companies. The very requirement to provide mandatory reporting for enterprises that emit more than 150 thousand tons of CO2 equivalent per year into the atmosphere has been introduced since the beginning of 2023. From 2025, companies with emissions of more than 50 thousand tons of CO2 equivalent per year will also be required to transfer data to the register.
Read more in the Kommersant article. “The command “gas” is given to everyone”.