According to BCG, the burden of the new collection for exporters from Russia will be from 3 billion to 4.8 billion dollars a year, and from 1.4 to 2.5 billion dollars paid by oil and gas companies from 0.4 to 0.6 billion from steel and mining. Also can experience a significant load fertilizer producers, pulp and paper and glass industry.
Russia is the second largest exporter to the EU after China in CO2 emissions (of about 150-200 million tons annually for all goods and services), and the EU account for 42% of Russian exports, and it is based on just oil, gas and metals.
the European Commission is considering the introduction of a carbon levy on imports, which would create a competitive advantage for foreign companies with low greenhouse gas emissions. It is one of several mechanisms, during the “green deal”, designed to turn Europe into the world’s first “carbon neutral continent”. European Commission President Ursula von der Leyen recently named “European green course” a key element of economic recovery after the pandemic COVID-19. Furthermore, the carbon fee on imports is strong support among European manufacturers. Since 2005, many of them have to buy quotas for greenhouse gas emissions, and they would apply the same rules to foreign competitors, especially from countries with less stringent environmental standards. The specific mechanisms and timing of the introduction of the carbon collection has not yet been announced.
Russia believes a carbon fee contrary to the norms of the world trade organization, said last week the Minister of economic development Maxim Reshetnikov. “Russia is extremely concerned by attempts to use the climate agenda to create new barriers,” he said at a briefing following the meeting with the Ministers of BRICS.
According to BCG, the amount of the initial fee may be $ 30 per ton of CO2 emissions. Given that part of the goods and services not yet included in the EU ETS (Emission trading scheme – a scheme for trading quotas for greenhouse gas emissions), such as transport services, BCG defines the new collection of the taxable base in the 100-160 million tonnes, which gives the load for exporters from Russia from 3 billion to 4.8 billion dollars a year. This calculation is based on the assumption that the be subject to collection will be the whole volume of emissions, but an option, and when to incur charges will only excess emissions over the established benchmark.
the Introduction of a carbon charge can lead to the fact that in some industries, Russian companies will lose market share in the EU. For example, for producers of nitrogen fertilizers carbon tax may be prohibitive high, reaching 40-65% of the current export value of fertilizers. High prices for Russian raw ��EFT can lead to the fact that European chemical producers will start to buy more raw materials from Saudi Arabia, where production leaves a smaller carbon footprint, I believe in a BCG.
In other sectors of the Russian companies, however, can oust its competitors: for example, in the steel market, Russian producers have a competitive cost structure and a lower carbon footprint compared to China. In addition to difficulties, companies and new market opportunities. “So, the canadian oil is two times more carbon-intensive than ours, that makes the chances of our players out of the market less efficient competitors when setting up direct sales channels,” says managing Director and partner of BCG Anton Kosach.
BCG calls the five key areas of proactive actions for the government of Russia, including the introduction of government carbon tax or the creation of the Russian system of trade emissions (ETS) by analogy with the exchange of the EU ETS (in this case due to the policy of the EU ETS under certain conditions may be of mutual accounting of emissions), and subsidies for strategic industries, linked to commitments to reduce emissions.
Of the top 8 exporters to the EU system of regulation of greenhouse gases is not only in Turkey and Russia. China, being the largest exporter, started to tackle this problem in 2013. This year the planned launch of a Chinese ETS, which in 2014 was conducted with the expert assistance of the EU. The changes will concern first of electricity: emissions of the sector is almost two times higher than the entire emissions of the regulated EU ETS.
At BCG believe that the carbon tax may not be introduced in late 2021 to early 2022. “It is extremely important to ensure the development of dialogue with the EU, the restructuring of domestic regulations and support strategic carbon sectors – calls on partner and Director, BCG Konstantin Polunin. Companies should begin to measure your carbon footprint, to track the cost of carbon emissions and their impact on the overall costs, plan for various scenarios, as well as to connect to the process of formation of state policy in this sphere. Those who best cope with this task in each of the sectors will not only gain a competitive advantage in Europe, but will pass less adaptive competitors in other markets, as more countries introduce financial incentives for producers in the framework of combating climate change.”
