22 Feb 2022 09:21

Russian Econ Ministry proposes postponing creation of national carbon unit trading system

MOSCOW. Feb 22 (Interfax) - Russia's Economic Development Ministry has proposed to postpone a decision on the creation of a national system for trading carbon units, a source familiar with a draft ministry report for the Security Council told Interfax.

The ministry believes it would make sense to revisit this issue if the practice of market participants freely choosing ways to sell carbon units and related derivatives, if such are created, turns out to be ineffective, the source said. At present, passed laws and bills that are in the works do not impose restrictions on the selection of platforms for and means of trading carbon units.

The ministry said this approach is consistent with the principles of freedom to engage in entrepreneurial activities and competition.

The ministry also said in the report that the organization of primary auctions for greenhouse gas emission quotas and a secondary market for quotas is not necessary at this stage, because the Sakhalin experiment does not envisage either the primary or secondary sale of quotas distributed for free.

The State Duma passed a bill on an experiment to restrict greenhouse gas emissions in Sakhalin Region in the third reading on February 16. The experiment will run from September 1, 2022 to December 31, 2028 and other Russian regions will be able to join it.

At the federal level, the law on a national system for trading carbon units was passed in the summer of 2021. It introduces mandatory greenhouse gas emissions reporting for a number of Russian companies and creates the outlines of a national carbon unit trading system, but it does not provide for fines and does not set targets for emission reductions.