Expert opinions, TECHNOLOGY

Gaining competitive advantage with green technology in the new era

Programs to reduce negative impact on the environment and cut carbon emissions are still relevant as Russian companies plan to redirect deliveries to the countries of Asia and Latin America, which are also gradually implementing carbon duties. For instance, China, South Korea and Japan declared their intention to achieve carbon neutrality by 2050-2060; they launched a system to trade carbon emission quotas and plan to introduce the cross border adjustment mechanism (CBAM) within the next 4 or 5 years. The Asian versions of CBAM might cover a wide range of products, including some exports that are crucial for Russia. In addition, according to a forecast by Director of the Center for Political Analysis Pavel Danilin, Russia’s trade with the countries of the Asia-Pacific region is expected to grow by $50 bln in 2022.

The relevance of the sustainable development agenda is confirmed by the goal to achieve carbon neutrality set by the President of Russia, and outlined in the strategy for the country’s social and economic development until 2050. Naturally, the current events have made certain adjustments to the implementation of these plans, and the deadlines will probably be postponed. However, in the long term, Russian producers will stay on course to reduce the carbon footprint.

Given that the transition of Russian companies to sustainable development and organizing logistics and direct settlements with Asian and Latin American countries is a painstaking process that can take years, it is necessary to continue the implementation of programs aimed at cutting greenhouse gas emissions.

The introduction of green technologies does not only help to preserve the environment, but also allows for making the manufacturing process more efficient and viable, which is crucial in times of crises. In the long term, Russian investors will probably not change their views regarding the principles of sustainable development when assessing investment attractiveness of Russian companies. It is quite possible that banks will be interested in introducing methods of environmental ranking to trigger demand for corporate loan products using a minimal rate diversification. The role of green bonds as a tool to attract a relatively cheap capital as compared to bank loans to implement investment projects can also increase.

Many Russian companies continue to implement their green programs. Minister of Natural Resources and Environment Alexander Kozlov, said at a meeting of the State Duma Committee for Ecology, Natural Resources and Environmental Protection that the sanctions imposed by the Western countries on Russia will not affect the quality of environmental control. Thus, on June 1, 2021, the Federal Law No. 296-FZ On Reducing Greenhouse Gas Emissions was adopted; the Ministry of Economic Development suggested creating a system of fines for largest greenhouse gas emitters that do not present reports starting 2023: up to RUR 500K for the first violation and RUR 1 mio for the second one.

Here are some of the companies that continue the implementation of projects aimed at reducing their carbon footprint:

  • Arkhangelsk Pulp and Paper Mill (adopted low-emission development strategy).
  • Nornickel (continues to implement the Sulphur Program).
  • The project to redevelop the Irkutsk Aluminum Plant, announced in 2021, will continue.
  • Despite the difficult international conditions, Rosneft remains committed to the ESG course. The company’s goal is to achieve carbon neutrality by 2050 in the scopes 1 and 2 (direct and indirect emissions).

Industrial waste makes up 90% of the total waste generated. The greatest amount is generated by the metallurgical industry, with each enterprise producing an average of 234,600 tons of waste per year, followed by the chemical industry (35,400 tons) and the pulp industry (14,000 tons). Industrial enterprises’ operations generate industrial and storm wastewater, a major cause of numerous environmental issues. While treating industrial wastewaters, metallurgical and engineering enterprises face the problem of processing and disposal of cutting fluids (coolants), used in excessive amounts of up to several tens of thousands per year at each facility. This poses a hazard primarily because the wastewater often contains oil products and other toxic substances.

Existing wastewater treatment technologies, which involve the use of imported reagents, often fail to produce the desired result for certain types of pollution, such as for oil products. In addition, their use is substantially hampered by the current economic situation, with an actual shortage of certain reagent supplies.

At many facilities, alternative methods of industrial wastewater treatment such as evaporation are economically unviable as evaporators require large capital investments and high energy costs during operations; they can produce greenhouse gas emissions, sometimes up to 2,500 tons of CO2 per year by a facility. In addition, filters often need replacement, and fail to provide the required quality of cleaning.

The use of organic polymeric coagulants and natural flocculants provides a viable way to tackle the shortcomings of existing technologies as well as a more efficient method of renewable bioresources use and industrial sewage treatment.

Russia already has available production facilities to manufacture a wide range of biopolymers with the use of domestic technology and raw materials, such as biomicrogels – cleaning products made from waste and agricultural by-products that can reduce CO2 emissions, with a CO2-neutral production process and the usage not requiring any heating or high energy consumption. Through its lifecycle, every kilogram of biomicrogels used for metallurgical coolant treatment reduces greenhouse gas emissions by 600–1,500 kg of CO2-eq, cleaning generated wastewater to meet the maximum allowable concentration norms and reducing the cost of treatment two- or even threefold compared to traditional methods. Biomicrogels have proven to be tenfold more efficient for water treatment than traditional methods; they can also reduce water and energy consumption, and decrease the total amount of waste.

The efforts to implement sustainable development programs will help Russian companies maintain their competitiveness in the local market, and allow them to expand internationally. Despite the effects of the new economic realities, we see opportunities available in the Russian market for implementing such programs. Russian companies already showcase viable alternatives to western technologies, products and solutions, while large domestic enterprises have all necessary conditions for implementing them.

By Andrey Yelagin, General Director, BioMicroGels research and production association

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