13 Jan 2022 18:30

Chubais: Russia could become global leader in hydrogen power, CO2 burial

MOSCOW. Jan 13 (Interfax) - Russia with its natural and technological advantages can become a world leader in hydrogen energy and CO2 capture and burial, Anatoly Chubais, the Russian president's special envoy for relations with international organizations on achieving sustainable development goals, said at the XIII Gaidar Forum.

Due to the inevitability of the energy transition, a number of completely new industries will emerge in the world and in Russia, he said. "By 2030, up to a dozen industries may emerge in the country that do not exist now. And we have fundamental advantages for this - both natural and technological. Among the possible 10 new industries, the two key ones could be the development of hydrogen energy and CO2 capture and burial," he said.

"As for hydrogen as the new natural gas, Russia has fantastic advantages here. I believe that in 2030 Russia can reach a sales volume range of 6 to 10 million tonnes in world markets, which is near $40 billion - gigantic figures. And the creation of the hydrogen industry: production, storage, transport - these are difficult challenges, in which Russia is likely to be among the first. This means that we have a chance to create something completely new," Chubais said.

"As for the second example, carbon capture and storage, it is already quite clear that this will be a huge industry. To put it very primitively, we are talking about capturing the CO2 that is formed as a result of combustion and pumping it back into the subsoil. Two or three years ago, this looked completely exotic and not even serious. Today, a particular company, Gazprom Neft , is developing a project to capture and store a serious volume of CO2 - about 1.5 million tonnes - in the Orenburg Region," the official said.

According to Chubais, the most important thing is that Russia has enough technological groundwork for the implementation of the task of CO capture and storage: there is an understanding of the functioning of underground gas storage, there are appropriate technologies. Moreover, the country has enough suitable underground storage facilities where CO2 can be injected.

"For comparison, Norway is currently implementing a project of similar scale together with Great Britain in the North Sea. You don't have to be a big expert to understand that if you are going to inject CO2 into an underwater well, it is more expensive than an underground one on land. This is first of all. And secondly, CO2 will have to be transported there using tankers. In every sense, it is clear that the project in Russia will most likely be at least 1.5-2 times cheaper," Chubais said.

"I don't know if there is another country in the world that is comparable to Russia in terms of the potential volume of the carbon capture and storage industry. And if we take into account that this process will be cheaper in Russia, then there are prerequisites for investors to come here who will want to invest money in such projects," he said in summary.

Starting in 2022, Russia will introduce the first legislative initiatives allowing for development of a new industry in the country - carbon dioxide capture, injection and storage (CCS). Thus, beginning on January 1, 2022, subsoil users in Russia will be able to apply for licenses for construction of greenhouse gas storage sites. Amendments to the legislation are also being prepared to allow storage of CO2 - currently there are no such permissions at the legislative level. Furthermore, the Ministry of Natural Resources and Rosnedra are studying the most promising areas for burial of CO2, with particular interest in Western Siberia and the Orenburg area.

Among oil companies, three companies have made public statements about their CCS plans.Tatneft plans to inject greenhouse gases into underground reservoirs near the Nizhnekamsk industrial zone (CO2 emitters are the Nizhnekamskaya TPP-2 and the TANECO refinery). Gazprom Neft is beginning a pilot project in the Orenburg region, where it plans to build 1 million tonnes of CO2 injection capacity per year at a cost of 30 billion rubles (the emitters are steelmakers and power generation companies). Finally, Novatek plans to combine projects to capture and bury CO2 from its plants - Yamal LNG and the ammonia plant project under development at the Ob GCC.

Carbon dioxide capture, injection and burial is an effective way to decarbonize industrial facilities without significantly overhauling them. It is recognized as one of the main tools for achieving climate goals along with increasing energy efficiency and switching to renewable energy sources.

The challenges of the energy transition, Chubais said, will require a major revision of Russia's Energy Strategy (now approved until 2035) and related sectoral strategies: "The baseline current document in Russia, called the Energy Strategy, the Russian Energy Strategy through 2035, is all wrong... it was created by people who were deeply convinced that there is no energy transition and there will not be one. They were wrong. The coal industry strategy, the oil industry strategy, the gas industry strategy, the electricity industry strategy all proceed from the energy strategy. Guys, this all needs to be reconsidered!" Chubais said.

One of the key vectors of development of energy industries should be to increase the volume of energy resource recycling, he said. "85% of oil is burned after oil refining, and 15% is used by the petrochemical industry. In gas the ratio is even more harsh: 95% and 5% (95% is burned and 5% is converted). The first strategic direction, of course, is to start changing this ratio. Gazprom has already started doing this, as has SIBUR, which has a brilliant project in the Amur Region and a great project in Ust-Luga. This is a strategy, not a tactic, we must continue to increase investment there. This will enable us to use our natural advantage in the form of gas reserves even when it becomes difficult or even impossible to burn it," Chubais said.