The head of the Ministry of Economic Development presented a draft law on limiting greenhouse gas emissions at a government meeting

The Russian government at a meeting on Wednesday, February 17, considered a draft federal law "On limiting greenhouse gas emissions" prepared by the Ministry of Economic Development. The document was presented by the head of the department, Maxim Reshetnikov.

"The Government has prepared a draft law on limiting greenhouse gas emissions on behalf of the President. This is part of our international obligations under the Paris Agreement and the Russian Federation's new climate policy. This is the first time we are adopting such a regulation," said Russian Prime Minister Mikhail Mishustin. "Now all businesses whose operations are accompanied by significant amounts of greenhouse gas emissions will report on this, such a requirement will become mandatory for each of them. At the same time, the new regulation will enable businesses to implement their own climate projects, and their implementation will attract green investments", - added the prime minister.

The bill creates a fundamentally new mechanism of economic regulation. It provides for the introduction of a phased model for regulating greenhouse gas emissions without taxation and mandatory payments. The key objective of the new regulation is defined by the Decree of the President - by 2030 to limit greenhouse gas emissions to 70% of their 1990 level, taking into account economic growth and increasing absorption capacity of forests.

The concept of the bill includes two major blocks.
Firstly, for the first time in Russia, mandatory carbon reporting will be introduced for the largest emitters. This reporting will be collected and summarized by a government-authorized body. Under this accounting system, the enterprises that are the largest emitters of greenhouse gas emissions (more than 150 thousand tons of carbon dioxide equivalent in the first phase until 2024) will submit mandatory carbon reporting. The remaining organizations have the right to submit carbon reporting on a voluntary basis. After 2024 businesses, whose emissions are above 50 thousand tons of carbon dioxide will have to report.
This will create an information basis for the management of greenhouse gas emissions in the economy and its industries.

The second block is associated with the formation of a legal framework for the circulation of carbon units - as a tool to reduce the carbon footprint and attract investment. Any organization will be able to voluntarily implement a climate project. As an example of such a project can be considered the modernization of enterprises, which increases the energy or resource efficiency of production processes, which in turn leads to a reduction in greenhouse gas emissions. Another example could be the so-called forest-climatic projects, when due to a set of measures it is possible to increase the absorption of greenhouse gases in natural ecosystems (for example, increasing the efficiency of forest management, restoration of forests and biodiversity on burnt areas, etc.).

The emergence of a new class of investment projects aimed at meeting the climate goals of the Paris Agreement provides an opportunity to create a new market in Russia associated with the circulation of carbon units. This will stimulate investment in climate projects and by market mechanism will form the price of greenhouse gas emissions in Russia.

"Of course, the most important thing is for all Russian carbon units to be recognized internationally. We are working on this track with the countries participating in the Paris Agreement," Maxim Reshetnikov emphasized.

According to the information of the Ministry of Economic Development of Russia, there is a demand for such projects on the part of business. Implementing them, the companies will be able to reduce the carbon footprint of their products and increase their investment attractiveness in international markets. The department considers the climate agenda in a broad context and includes green financing, energy saving, hydrogen and renewable energy issues.

There is a lot of work to be done to implement the bill to develop 11 by-laws. It is important that the entry into force of the law will be synchronized with the entire package of bylaws. Besides, it will be necessary to prepare amendments to the Code of Administrative Offences and the Tax Code.

In contrast to the European model of regulation, the bill does not provide for restrictive measures for business, there are no quotas and fees for greenhouse gas emissions. The priority is to protect the interests of Russian producers. The Ministry of Economic Development is working on creating the necessary informational basis for climate policy, and giving business the opportunity to use climate projects to reduce its carbon footprint and attract sustainable investment.

In his speech, Maxim Reshetnikov separately thanked Deputy Prime Minister Viktoria Abramchenko, under whose leadership numerous conciliation meetings were held, which allowed to develop a unified position on the bill within the Government.
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