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Europe’s Carbon Border Adjustment Mechanism: Prospects for Russian Suppliers, Russia’s Potential Response

Europe’s Carbon Border Adjustment Mechanism: Prospects for Russian Suppliers, Russia’s Potential Response

The European green policy is not only about some ideology but also about charging suppliers of goods for high carbon footprints.

The launch of the Carbon Border Adjustment Mechanism (CBAM) is nearing and getting more real.

In July 2021, the European Commission published framework conditions of the CBAM implementation. It poses a serious threat to Russian exports. The new carbon regulation will add serious extra costs to exports of Russian businesses to the EU.

Apart from prospects of paying extra fees, the CBAM has sharply intensified discussions in Russia about mechanisms of the climate regulation and policies in the field of carbon emissions that Russia should implement.

The new report elaborates on the following issues:

Main parameters of the CBAM

Reorganization of the Emissions Trading System
The CBAM launch schedule
The suggested carbon fee collection mechanism

Possible consequences of the CBAM for Russia

Initial estimations of potential losses
Main industries in the risk zone

Russia’s reaction to the CBAM

Formation of Russia’s negotiation position
Suggested variants of minimization of CBAM implications and feasibility of such measures

Potential beneficiaries of the CBAM in Russia

Formation of the carbon footprint reduction services sector in Russia
Utilizers, foresters and financiers

Main climate policy regulators in Russia

Key figures
Positions of relevant ministries and agencies

Formation of the regulatory framework of Russia’s new climate policy

The analysis of new decrees, laws and strategies
Creation of the system to monitor greenhouse gas emissions of enterprises

Prospects of introduction of carbon payments in Russia

A pilot project of a low-carbon cluster in the Sakhalin Region

Medium-term forecast of developments

Contents of the report:

INTRODUCTION	3
CBAM AS NEW ECONOMIC REALITY	5
The history of carbon border regulations/td>	5
Main parameters of CBAM	7
CBAM as instrument of discrimination	10
Consequences of CBAM for Russia	13
THE POSITION OF RUSSIAN REGULATORS ON LOW-CARBONDEVELOPMENT ENFORCEMENT	18
Formation of the legal framework of the new climate policy	18
Climate issues in Russia’s National Security Strategy	23
Development of CBAM response measures	25
Actions of Russian regulators in the CBAM context	27
MAIN BENEFICIARIES OF CBAM IN RUSSIA	31
Climate fighters	31
«Utilizers»	32
«Foresters»	34
«Financiers»	36
CONCLUSION	39

Date of release:	November 8, 2021

If you are interested to obtain please contact » Elena Kim

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