Russian Sberbank will start tenders for Joint Implementation projects

Rashid Alimov

Governmental Decree no. 843 (from October 28, 2009) "On measures to implement Article 6 of the Kyoto Protocol of the UN Framework Convention on Climate Change" came into force on November, 10.

For Russia, which in the Kyoto Protocol is referred to as an industrialized country, mechanism of joint implementation (JI) is particularly important. JI mechanism describes projects carried out at the territory of an industrialized contry at the expense of investments of other industrialized countries. Reduction of emissions, following realization of such projects, is then transferred to the donor country.

To date, due to lack of appropriate legislation, no JI project has received government approval to be realized in Russia, although the Ministry of Economic Development has received over 40 applications. Meanwhile, similar projects are already implemented in Ukraine. According to experts, Russia could potentially take up to 58% of the world JI market.

Russian Socio-Ecological Union notes that because of the sluggishness of building the system for JI projects in Russia, significant investment has been missed, but Russia is capable to rectify the situation.

Potentially Russia may hold 58% of the world JI marketPotentially Russia may hold 58% of the world JI marketThe mechanism, approved by the Government, involves a competitive selection of projects by the Sberbank, which has been designated «operator of carbon units». This appointment surprised environmentalists, but in any case, applications selected by Sberbank will be approved by the Ministry of Economic Development and Trade. The rules of competition have not yet been approved and, accordingly, so far there is no official limit for reductions of emissions, which can be used in the JI projects.

“Competitive selection in this situation is wrong. Nowhere in the world are there tenders for JI projects, because the purpose is not to limit the participants, but that as many companies as possible participated in the JI mechanism,” Mikhail Yulkin, an expert of the Moscow Center for environmental investments, said at a conference of the Russian Socio-Ecological Union. According to the expert, is also very important to remember that not all projects aimed at reducing greenhouse gas emissions will meet all the criteria listed in the Governmental Decree. In particular, reduction of greenhouse gases in the chemical industry is not related to energy efficiency.

For Russia, one of the areas of JI projects can be putting an end to wasting oil associated gas. This issue was mentioned last week by President Medvedev in his official message to the Federal Assembly. The President described burning of oil associated gas as "an example of inefficient use of energy." "Environment is polluted, and tens of billions of rubles are converted into smoke," - he said.

According to WWF, burning of oil associated gas accounts for about 1% of all global emissions of greenhouse carbon dioxide, and also brings into the atmosphere many dangerous chemical elements. Russia holds the world leadership in the volume of oil associated gas burning.