Russia’s first tender for ERUs – but it is unclear why MMK is involved. There have been significant delays in organising the tender, but it had been expected in recent weeks.
SBB 18 March Russia’s MMK is bidding for carbon credits in the country’s first tender of this type. However it was unwilling to reveal to Steel Business Briefing the details of its emission-reduction project. One source suggests the bid could be associated with mine expansion.
The tender is being organised following Russia’s accession to the Kyoto Protocol several years ago. Moscow-based Sergei Sitnikov of Baker and McKenzie, a law firm explains that, to date, Russia has no clear procedures for the issue of Emission Reduction Units (ERUs). They are linked to JI or Joint Implementation projects under the Protocol.
He adds that Sberbank, a majority state-owned bank is collecting bids and reviewing the projects. “The bank and an expert council to be formed by the bank will make recommendations to the Ministry of Economic Development (MED), which will then approve or reject bids,” Sitnikov tells SBB.
Each tender has a limit of ERUs of 30m tonnes. Bids will be judged on grounds of ecological and energy efficiency, their technical and financial potential and economic and social impact.
MMK spokesperson Evgeny Kovtunov explains that if companies in the scheme reach specific carbon reduction targets in their carbon reduction projects, they can then sell on the ERU’s to other companies outside Russia. “The penalty for excess emissions could be €100/tonne, while current quotes for carbon trades stand at €10/t,” Kovtunov speculates.
It also tells SBB that it expects a decision on whether it has been successful in 30 days.