7 Dec 2021 10:07

Four Russian regions ready to follow Sakhalin in carbon unit trading experiment

MOSCOW. Dec 7 (Interfax) - Bashkortostan, Khabarovsk Territory and Irkutsk and Kaliningrad regions have expressed interest in conducting a carbon unit trading experiment and establishing a system to track emissions and absorption of greenhouse gases, the press service of Deputy Prime Minister Viktoria Abramchenko, whose brief includes the environment, reported.

Sakhalin Region was selected as the pilot region for this experiment and the government legislation commission has supported a bill to conduct the experiment in this region. The bill is aimed at carrying out the experiment and achieving carbon neutrality in Sakhalin Region by December 31, 2025.

An inventory of greenhouse gases in Sakhalin Region was done in 2021, counting emissions of 12.3 million tonnes of CO2 equivalent and absorption of 11.1 million tonnes of CO2 equivalent. The difference between emissions and absorption was about 10% or 1.2 million tonnes of CO2 equivalent, and this is the amount that needs to be reduced to achieve carbon neutrality.

Regional programs are being implemented to achieve this goal. By 2025, the region needs to convert 145 boiler houses from coal to gas, increase the share of transport that runs on natural gas and electricity to 50%, and increase the share of renewable energy sources. There are also plans to launch a hydrogen production cluster.

The region will also create a carbon market based on quotas for emissions from the main regional regulated organizations. Under the bill, payment for exceeding quotas will be calculated by the regional regulated organization independently by multiplying every tonne of CO2 equivalent in excess of the quota by the rate of this payment. The rate for exceeding quotas will be set by the Russian government based on average world prices for greenhouse gas emissions and the average price of quotas in the European trading system.

The bill also introduces requirements for regional regulated organizations to provide carbon reporting to the authorities and comply with set emission quotas. The list of organizations will be compiled by the Sakhalin regional government according to procedures prepared by the Economic Development Ministry.

An institutional foundation for accreditation of verifiers will be established for verification of carbon reporting and documentation on climate projects. Among other things, this will also make it possible to create a mechanism for independent definition of greenhouse gas absorption for clarification of the methodology used in the national cadastre.

"The creation of special regulation is one of the most important steps for the transition to the low-carbon development strategy. As part of the experiment we need to test the free circulation and offset of carbon units and quota fulfilment units. The most important part of the experiment is setting quotas for greenhouse gas emissions," Abramchenko said.