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: