‘All these huge opportunities apply to Russia’
Foreign partners see broad prospects of decarbonising the Russian energy sector
Although achieving net-zero emissions seems to be an unattainable goal for Russia given its commodity-dependent economy, there are still many low-carbon initiatives that can be successfully applied to reduce environmental pollution.
International oil companies investing in the Russian energy industry are seeking low-carbon projects, as green agenda advances, says S&P Global Platts. Last week, global and regional heads of energy companies, as well as Russian policymakers, discussed problems of decarbonisation of the country’s oil and gas industry during a virtual dialogue organised by the Moscow School of Management’s Skolkovo Energy Centre. The dialogue participants acknowledged that putting oil and gas out of the majority of the energy mix before 2050 “was out of question”. At the same time, meeting goals under the Paris Climate Agreement will require improving operational efficiency of Russian industry players as well as the use of compensatory mechanisms.
Hydrogen and liquefied natural gas (LNG) were highlighted by representatives of energy companies as priorities for reducing emissions. According to CEO of Total Patrick Pouyanné, customers ask them for clean LNG. “In Russia, when I think of huge reserves in Yamal, I also obviously think of clean hydrogen,” he said emphasising that these resources were also low-cost. “That’s why we continue to invest in Russia.”
President of BP Russia David Campbell noted the quick evolvement of Russia’s green agenda in the past few years and said that his company’s recent deal with Rosneft included work on joint energy transition projects including low-carbon technologies. BP is going to focus on hydrogen, carbon trading, renewable and forestation projects and carbon capture, utilisation and storage.
CEO of Shell Russia Cederic Cremers also considers that nature-based solutions and carbon capture and storage may help offset emissions that can’t be avoided. “All these huge opportunities apply to Russia […], and we need to deploy all of them in order to meet the target given the huge challenge,” he said. Cremers also welcomed Gazprom, Novatek and Rosneft to the international oil and gas methane partnership aimed at lowering methane emissions and said that his company was very keen to work with Sakhalin Oblast on the pilot of an emission trading system. The latter is meant to be launched and tested in 2023-2025, said Valery Seleznyov, first deputy chairman of the State Duma’s Committee on Energy. He explained that the system, if successful, would be extended to the whole country.
This spring, Russia is also expected to adopt legislation on reducing greenhouse gas emissions intended to stimulate investment in green projects. Besides, the government is working on a plan to develop green hydrogen. Russia’s energy strategy through 2035 assumes that the country will become one of the global leaders in hydrogen production and exports.