3 September 2021

Transition to a Sustainable Development Trajectory: Strategy, Resources and Implementation Tools

KEY CONCLUSIONS


International companies are interested in working with Russian business


“Asian investors are very interested in companies that are moving towards a green economy and sustainable development. They also understand that such changes do not happen quickly. I am sure that our investors will approve of the work that is being carried out in Russia today,” Head of Green and Sustainable Finance at Hong Kong Exchanges and Clearing Limited (HKEX) Grace Hui.


“I am sure that Russia possesses all the economic, political, and technological prerequisites necessary for sustainable development to become a sustainable trend,” Gazprombank (Joint Stock Company) First Vice President Natalya Tretyak.


“Great opportunities await here in the future. I think that we can expand our presence in Russia, and we will be able to provide funding for local institutions within the organization,” New Development Bank Vice President and Chief Financial Officer Leslie Maasdorp.


“Technology for metering and energy consumption management are world-class and may be of interest to most countries. Of course, we have not surpassed the most advanced countries – we are simply on the same level. But at the same time, our technology costs less and can compete as a result. It may be of interest in the diverse markets of Southeast Asia, the Middle East, and in many other regions,” Skolkovo Foundation Chairman Arkady Dvorkovich.


Business needs government support


“In the very least, the state should not create negative incentives, and this includes tax policy, where it should seek tax mechanisms that would serve more for a positive incentive than a neutral one,” Skolkovo Foundation Chairman Arkady Dvorkovich.


“Business will always find money in wide-reaching and major investments with which to modernize its production activities and introduce the latest technologies. What we expect from the state is help in getting domestic producers into the market,” Norilsk Nickel State Secretary – Vice-President Dmitry Pristanskov.


“When interaction between business and the state is a partnership where we can talk and listen to each other, it will lead us to a place of success,” SIBUR LLC Member of the Management Board and Managing Director Pavel Lyakhovich.


PROBLEMS


An absence of expensive modern technologies in Russia


“Russian technologies account for 30% to 70% of various new production processes. The percentage continues to grow, albeit slowly, and European and even Chinese technologies are outpacing us for now. [...] As far as energy storage is concerned, we are still a bit behind,” Skolkovo Foundation Chairman Arkady Dvorkovich.


“There are few [new experimental Russian technologies – Ed.]. First of all, they are definitely absolutely impossible to buy; they need to be developed [...] they have not yet been put into large-scale industrial production, and they are quite expensive,” SIBUR LLC Member of the Management Board and Managing Director Pavel Lyakhovich.


Modifying power systems is costly


“The unity of this agenda, the unity of taxonomy, is a critical issue for securing the crazy amount of investment that is needed for the energy transition to take place. We have been going over this question recently and have developed a model that [will show – Ed.] how much it will cost Russia to completely decarbonize to achieve net-zero. [...] Our numbers are absolutely terrible; we peak at about RUB 15–16 trillion annually. […] That is somewhere in the region of 14–15% of GDP at its peak,” Vice President for Sustainable Development at VEB.RF Andrey Bayda.


“Some of the expenses are really hard to single out. [...] We do spend a lot. We invest a lot. Over the past ten years, we have invested more than RUB 1 trillion in new production facilities or in improving existing production facilities,” SIBUR LLC Member of the Management Board and Managing Director Pavel Lyakhovich.


SOLUTIONS


Realizing Russia’s potential in the creation and development of alternative energy


“Energy storage technology is a very important topic; the world has yet to achieve great results, especially in terms of the efficiency and cost of energy storage. And I think that in the next 7–10 years, we should expect the most significant progress to happen precisely in this. [...] The second topic is hydrogen, which we’ve already mentioned, and in this case too there aren’t any technologies that are competitive in terms of cost, though I do think that something will turn up here, too, in the next ten years. [...] There is great potential for our existing shares of both nuclear energy and hydropower,” Skolkovo Foundation Chairman Arkady Dvorkovich.


“As in the case of the sulphur project [general name for the environmental programme providing for a 75% reduction in total sulphur dioxide emissions in the Polar Division of Norilsk Nickel by 2023 from 2015 levels – Ed.], more than 70% [of equipment – Ed.] is the localization of domestic. Because, as I said, there are no global precedents. As a result, we were forced to find and optimize industrial solutions of this kind within the Russian Federation,” Norilsk Nickel State Secretary – Vice-President Dmitry Pristanskov.


Creating new support mechanisms on the part of the authorities and banks for the energy transition


“We need to distinguish very clearly between additional costs and the structural changes that we are already making to investments. To a large extent, the investments that are being made simply have to be of a better quality from the point of view of sustainable development – these are not additional costs, they are just changes to the structure of current costs. Investment in our country remains stable at a level of slightly less than 20% of GDP, and it would be a good thing if a significant part of this investment was associated with sustainable development,” Skolkovo Foundation Chairman Arkady Dvorkovich.


“We have prepared four scenarios for low carbon development until 2050. […] Nuclear energy will grow from 20–22% of the current energy balance to 37%, depending on the scenarios; we plan to reduce coal from the current 13% to 5% in the intensive and aggressive scenarios. We hope to occupy a niche in the global hydrogen energy market. [...] We are facing a challenge in the international arena – namely, to verify the entire architecture of low-carbon development within Russia and to prepare the country for an energy transition,” Deputy Minister of Economic Development of the Russian Federation Ilya Torosov.


“One example we have is for the processing of mixed plastics. [...] If the state would help with this, it would be excellent for the coexistence of society, the state, and business,” SIBUR LLC Member of the Management Board and Managing Director Pavel Lyakhovich.


For more, see the Roscongress Foundation’s Information and Analytical System roscongress.org