Climate and Control: Russia Wants to Be Carbon Neutral by 2060 |  Articles

Russia does not use energy as a weapon. Vladimir Putin said this during the plenary session of the Russian Energy Week forum… According to him, such speculations – “Politically motivated chatter”… In addition, the president noted that Moscow does not set itself the goal of abandoning gas transit to Europe through the territory of Ukraine. Nevertheless, the deterioration of the Ukrainian GTS may lead to the fact that supplies along this route will stop… The head of state also assured the participants that Russia will continue to fulfill its obligations on the environmental agenda. In particular, Russia plans to become a carbon neutral country by 2060.

Sore head

One of the largest forums dedicated to the fuel and energy complex and international cooperation in this area was launched in Moscow on October 13 for the fourth time.… In addition to Vladimir Putin, the plenary session, which took place on the first day of Russian Energy Week, was attended by representatives of large corporations, including, for example, Exxon Mobil Corporation, BP, TotalEnergies, as well as Daimler AG and Mercedes-Benz AG.

However, only the moderator of the plenary session, CNBC TV presenter Headley Gamble, was on the main stage with the president. Company executives joined the video call. At the beginning of the event, there was also a video message from the President of Angola, João Lourenço, the African country presiding over OPEC this year.

Discussion of the energy agenda plays a special role against the backdrop of the crisis caused by the coronavirus pandemic. According to the results of last year global primary energy consumption decreased by 4.7%. This was the biggest shock to the industry in 70 years., stated Vladimir Putin.

Photo: REUTERS / Sergei Ilnitsky

Due to the fall in demand, prices for natural gas have also changed. If three years ago the cost of natural gas was $ 282 per 1,000 cubic meters. m, then in 2020 – $ 113, the head of the Russian Federation recalled. A unique situation has developed in the oil sector, when the price of black gold for the first time in history took a negative value in the spring of last year.

But if the oil market was stabilized thanks to an agreement at the OPEC + level, the situation around gas, especially in Europe, remains unstable… On October 6, at 11:28 Moscow time, the cost of November futures according to the index of the most liquid European hub TTF in the Netherlands reached $ 1969.2 per 1,000 cubic meters. After that, the price of gas began to fall, and on October 12, the exchange price in Europe dropped below $ 970, although on the 13th it rose again to $ 1130 per thousand cubic meters. m.

Vladimir Putin denied any accusations that Russia was involved in the gas crisis. On the contrary, the jump in prices is primarily due to the actions of the Europeans themselves.… In early 2021, in many countries of the region, a cold winter led to a serious decrease in gas reserves in underground storage facilities. In the summer, due to the heat and calm weather, the production of wind energy, which is increasingly relied on in the EU, has significantly decreased. According to Vladimir Putin, this year Europe did not replenish its stocks of blue fuel and relied on spot supplies. In conditions of rush demand, by their actions, they spurred prices.

– I repeat: the rise in gas prices in Europe was the result of a shortage of electricity, and not vice versa. And there is no need, as they say, to shift from a sore head to a healthy one., as we say, as some of our partners are trying to do, – said the Russian leader. – Over the past decade, step by step, systemic flaws have been laid in European energy. It was they who led to a large-scale market crisis in Europe..

However, not everyone in the region is inclined to blame Russia for high gas prices. So, rlava TotalEnergy Patrick Pouyanne said at the plenary session that the main reason for this growth is not at all a decrease in supplies from Russia, but precisely from other countries, that is, from alternative sources.

Political chatter

According to Vladimir Putin, Russia does not use energy as a weapon. He called such statements “politically motivated chatter”… The President recalled that even during the most difficult periods of the Cold War, Moscow fulfilled its contractual obligations on an ongoing basis.

Bye EU policy is to look for alternative suppliers to Gazprom, Artem Tuzov, director of the capital market department at Univer Capital, explained to Izvestia. But as a result of the rise in gas prices from alternative suppliers, it turned out that Gazprom was selling fuel at the lowest prices for consumers.… Accusations against Russia of using energy as a weapon are groundless. Rather, on the contrary, the refusal to consume Russian gas was of a political nature on the part of the EU, which resulted in a rise in prices.

Russian President Vladimir Putin

Russian President Vladimir Putin at the plenary session of the Russian Energy Week international forum

Photo: RIA Novosti / Sergey Guneev

Russia will continue to provide guaranteed uninterrupted gas supplies. She is ready to increase exports to Europe in excess of contractual obligations… The President noted that over the nine months of this year, the country has already increased supplies to European partners by 15%. And by the end of 2021, Russia may reach record volumes. According to Artyom Tuzov, this can happen due to the conclusion of new long-term contracts, the supply of which can begin this year.

Gas supplies to Western European customers are carried out not only by Gazprom, but also by Novatek. This is a very good result, especially after the flop last year. It is believed that from the recovery of oil and gas exports, Russia’s trade balance will receive an additional $ 50 billion, this is another serious precondition for further strengthening of the ruble. Since the beginning of the year, the capitalization of Russian fuel and energy companies has been steadily growing, – said Andrey Loboda, an expert in the field of financial communications, in an interview with Izvestia.

“Soft-boiled boots”

The discussion could not do without a discussion of gas supplies through the territory of Ukraine, which fears to lose transit, in particular, after the completion of the construction of the “Nord Stream-2”. Vladimir Putin, however, noted that all decisions on the creation of new routes were taken solely on the basis of economic considerations, and Russia did not build pipelines to bypass Ukraine.

Listen, this is just another rubbish, “soft-boiled boots”, as we say– said Vladimir Putin.

According to him, in 2021, Russian gas supplies through Ukraine will exceed obligations under a long-term contract by 10%. Russia is ready not only to keep the contract for gas transit through the neighboring country after 2024, but also to increase supplies. However, Moscow must understand the volume of purchases.

If Europe is moving away from hydrocarbon raw materials, including gas in the future, how can we today undertake obligations to increase transit through Ukraine if Europe does not buy from us?– said the president.


Photo: REUTERS / Leonhard Foeger

Meanwhile, he drew attention to the high degree of deterioration of the gas transportation system of Ukraine (80-85%) – at some point it may simply burst, and then Europe will be left without this supply channel altogether. Therefore, now it is necessary, first of all, to bring it into a normative state, the head of the Russian Federation is sure.

There is an acute question of who will finance its reconstruction. Ukraine itself cannot do this due to the lack of the necessary funds. Russia is not allowed to reconstruct the Ukrainian GTS due to political reasons. Remains the EU, – believes Artem Tuzov.

At the same time, the EU faces the goal of reducing the consumption of Russian gas in favor of alternative suppliers, the expert added. He believes that “the Ukrainian GTS is, one might say, doomed to a man-made accident in the future.”

The relations between the EU and Ukraine in this area have already turned into a ball of political hypocrisy, Andrei Loboda is sure. In his opinion, Kiev will face tragic consequences and a temporary supply disruption.

Turkish Stream, SP-1 and SP-2 will not leave Europe without Russian gas. With the commissioning of “SP-2” Ukraine will turn into an ordinary regional transit country, its GTS is already unattractive for investors today, – said the expert.

Meanwhile, Vladimir Putin announced that administrative barriers remain for the new gas pipeline, which are still preventing it from being launched. Although the use of this pipeline can significantly reduce tension on the gas market and reduce fuel prices in Europe.

Neutral plans

During the discussion, the environmental agenda was also touched upon, which is directly related to energy issues. According to the President, Russia is fully aware of the severity of the challenges in this area. The average annual temperature in the country is increasing more than 2.5 times faster than the global temperature, in the Arctic the rate of warming is even higher.

«Over the coming decades, we expect to ensure the accumulated volume of net greenhouse gas emissions even lower than in the European Union.“, – said Vladimir Putin. Besides, In practice, Russia will seek carbon neutrality for its economy. Moscow wants to achieve this no later than 2060.

– This is the broadest planning horizon for modern Russia. Perhaps the Kremlin has never had such long-term energy plans, ”Anna Bodrova, a senior analyst at the Alpari information and analytical center, told Izvestia. – It is quite possible to reach carbon neutrality if it is beneficial for the state. In an amicable way, the volume of emissions can be reduced even faster, but this will require finances. Everything will depend on the specific investment, because reducing emissions means at least upgrading equipment.

Russian President Vladimir Putin

Russian President Vladimir Putin speaks at the Russian Energy Week international forum

Photo: RIA Novosti / Mikhail Metzel

According to the president, climate preservation issues should be tackled in close connection with development plans for economic sectors, primarily the energy sector… He noted that according to experts’ forecasts, on the horizon of 25 years, the share of hydrocarbons in the world energy balance may decrease from the current 80-85% to 60-65%. At the same time, the role of oil and coal will decrease, and the role of natural gas, as the most environmentally friendly “transitional” type of fuel, will increase.

This also applies to the development of liquefied natural gas production. By 2035, the Russian Federation plans to increase LNG production to 140 million tons per year… By this time Moscow wants to occupy 20% of the global LNG market due to low production costs and competitive logistics. In addition, in the horizon until 2035, Russia intends to increase its share in global supplies of petrochemical products from the current 1% to 7%.

Also at the forum, in addition to the plenary discussion, other notable events took place. For example, Anton Moskvin, Vice President for Marketing and Business Development of Rusatom Overseas JSC (an enterprise of the Rosatom State Corporation), during the discussion “Hydrogen Future of Russia and the World: Dialogue with Business” stated that Rosatom will prepare a commercially viable proposal for the production of hydrogen by converting methane at a nuclear power plant by 2030.

A the government of the Russian Federation and “Gazprom” announced a joint effort to accelerate the development of technologies based on natural gas in the field of hydrogen energy and the creation of pilot projects… The Agreement of Intent for the development of hydrogen energy in Russia and the decarbonization of industry and transport based on natural gas was signed by Deputy Prime Minister of Russia Alexander Novak and Deputy Chairman of the Management Board of PJSC Gazprom Oleg Aksyutin. Now the state corporation must prepare a roadmap and submit it for approval to the Cabinet of Ministers.

In addition, it became known at the Russian Energy Week that the possibility of providing Rosneft with access to gas export through the SP-2 is still being worked out in the pit… This was announced on the sidelines of the forum by Alexander Novak.

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