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New conceptual documents of the Russian government on green energy and decarbonization

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    In recent months, there have been the following developments in the field of hydrogen energy and greenhouse gas emission reduction which may be of interest to many companies doing business in Russia:

    Concept of hydrogen energy development in the Russian Federation

    The Government of the Russian Federation has approved the concept of the development of hydrogen energy in Russia (Order No. 2162-r of August 5, 2021).

    According to the concept, the Russian Federation will strive to utilize the national potential for the production, export and use of hydrogen which will help to ensure its place among the world leaders in hydrogen production.

    The concept serves as a development in the “Roadmap” for hydrogen energy development for 2020 - 2024 previously adopted in October 2020 and defines the goals, objectives, strategic initiatives and key measures for hydrogen energy development in Russia for the mid-term period until 2024, the long-term period until 2035, as well as the main benchmarks for the future until 2050.

    The strategic initiatives presented in the concept include launching pilot projects for low-carbon hydrogen generation, creating consortiums for the production of Russian equipment and components, as well as developing infrastructure for the storage and transportation of this energy source.

    The concept also provides for the creation and development of industrial and technological clusters. It is envisaged that hydrogen clusters will be created at the regional level, including in the Northwest of the Russian Federation, focused on the EU; in the East, focused on Asia; and in the Arctic region, aimed at creating low-carbon energy supply systems throughout the Russian Arctic zone and exporting hydrogen.

    The concept outlines the following:

    1. from 2021-2024, in the medium term, it is planned to establish legal and regulatory frameworks which will ensure the functioning of hydrogen energy and its integration into the Russian economy with access to international markets, the creation of hydrogen clusters, the implementation of pilot projects to achieve the export sales of 200 thousand tons of hydrogen in 2024 and stimulate use of hydrogen energy in the domestic market
    2. from 2025 to 2035, the long-term forecast, is 2m tons of export sales in 2035 (or 12 m tons in the optimistic scenario). At this stage, large export-oriented hydrogen generation facilities should be created, and pilot projects involving the use of hydrogen in the domestic market on the basis of domestic technologies should be implemented
    3. the guidelines for 2036-2050 provide for full-scale growth of the hydrogen energy market. It is planned that by 2050, Russia will be able to supply up to 15m tons of hydrogen to the world markets (or 50m tons in the optimistic scenario). The cost of hydrogen production from renewable energy sources is expected to be more in line with the cost of fossil fuels, which will then pave the way for large projects to produce and export low-carbon hydrogen from renewable energy sources
    Strategy for the Russian Federation’s Economic Development with Low Greenhouse Gas Emissions

    The Government of the Russian Federation approved the strategy of economic development of the Russian Federation with low greenhouse gas emissions (Order No. 3052-r of October 29, 2021).

    The strategy was prepared pursuant to Presidential Decree No. 666 of November 4, 2020 “On Reducing Greenhouse Gas Emissions” and in order to implement the Paris Agreement of December 12, 2015.

    The strategy sets out measures to ensure that greenhouse gas emissions are reduced to 60 percent from their 2019 level and to 80 percent from their 1990 level by 2050 taking into account the maximum absorption capacity of forests and other ecosystems and under the condition of sustainable and balanced socio-economic development of the Russian Federation.

    Two scenarios are included in the concept - inertial and target (intensive). The target scenario has been taken as the basis for the strategy. The scenarios differ in sets of measures for decarbonization of the Russian economy.

    Among the industry-wide decarbonization measures, it is planned to support the introduction, replication and scaling of low- and no-carbon technologies, encourage the use of secondary energy resources, change tax, customs and budget policies, develop green finance and measures to preserve as well as increase the absorption capacity of forests and other ecosystems to support the capture, use and utilization of greenhouse gases, etc.

    It also provides for replacing part of the coal-fired generation with carbon-free and low-carbon generation, increasing electricity generation through carbon-free generation, increasing associated gas utilization, creating an export sector for hydrogen production based on hydrocarbons, disclosing to consumers information about the origin of electricity and its carbon footprint, using certain types of waste as energy resources, implementing innovative resource- and energy-efficient production technologies, and improving the quality of energy efficiency.

    The Ministry of Economic Development should develop an action plan to implement the strategy within six months.

    We will closely follow any further developments in the field of hydrogen energy and reduction of greenhouse gas emissions in Russia and publish all significant updates.

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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