What is the threat to Russia of the new EU carbon tax on imported products?

From 2023, the EU will introduce a carbon tax on imported products with high greenhouse gas emissions. It could affect about 40 percent of Russian exports. According to various estimates, our enterprises will have to contribute to the EU wallet from 6 to 50 billion euros annually. Russia has a counter-proposal regarding this tax. The correspondent of "RG" is talking about this with the deputy head of the Center for Responsible Nature Management of the Institute of Geography of the Russian Academy of Sciences, Candidate of Geographical Sciences Andrei Ptichnikov.

How does the EU intend to collect this tax? What is the mechanism? Will our raw materials economy withstand such a sensitive blow?

Andrey Ptichnikov: The tax applies to products imported into the EU with a high "carbon footprint", such as oil, gas, metals, cement, fertilizers, etc. For them, limits on greenhouse gas emissions will be set in accordance with EU standards. If they are exceeded, the exporter will have to pay tax. According to various estimates, its amount for suppliers from Russia can range from 2 to 6.5 billion euros annually.

But there is a scenario in which the collection can be much higher, about 50 billion euros.

Andrey Ptichnikov: This option is most likely unlikely, it may conflict with the WTO rules. We need to focus on the baseline scenario, according to which the tax will cost exporters about 33 billion euros until 2030.

But what to pay for? Many experts argue that all these numbers are completely unfair. It is said that these calculations incorrectly take into account the contribution of our forest to the absorption of greenhouse gases. And a number of experts generally state that Russian forests remove more carbon dioxide from the atmosphere than our entire industry ejects. However, according to international estimates, our forests absorb only 25 percent of all emissions in the country. Does everyone have their own calculator?

Andrey Ptichnikov: It's not that simple with the forest. Let's figure it out. You may be surprised, but in the EU documents, when calculating emission quotas, their absorption by the EU forests is not taken into account. Only direct emissions from industry, transport, housing and communal services are taken into account. Now this approach will be extended to suppliers of high-carbon products from Russia and other countries.

Why is the forest ignored in this tax? Is it fair?

Andrey Ptichnikov: There are several reasons. First, Europe developed the introduction of the tax proceeding from its own specifics. In the EU, forest areas are relatively small, and therefore absorb a very small part of emissions compared to Russia. Why introduce this factor if it is scanty? In a word, the authors of the method ignored their own forests.

But there is another reason: the so-called forest-climatic projects, which take into account the reduction of forest emissions, have gone out of the trust of Western experts. The fact is that at one time very large projects were implemented in the tropics for the preservation and restoration of forests. Large funds have been invested, a serious effect on the absorption of greenhouse gases has been obtained. But when the projects were completed, a situation often arose when mass felling was again carried out in such forests, for example, for agricultural producers. In addition, large-scale fires were frequent due to poor management. Therefore, forestry projects have a reputation for being unpredictable and unstable.

But this, as they say, is their problem. Why, with the world's largest reserves of forests, which are even called the lungs of the planet, should we play by their rules? What is this technique that equates our forests with those of Finland in terms of absorption effect?

Andrey Ptichnikov: The situation today is as follows. The Ministry of Natural Resources of Russia has recommended a methodology for the regional assessment of the forest carbon budget (ROBUL), approved by the experts of the UN Intergovernmental Panel on Climate Change (IPCC). Its main developers are the Center for Problems of Ecology and Forests Productivity of the Russian Academy of Sciences and the Institute of Global Climate and Ecology of Roshydromet and the Russian Academy of Sciences. This method was used to obtain that 25 percent of the absorption of emissions by our forests, which you are talking about.

However, now other methods have appeared, for example, the VNIILM Institute. There are completely different numbers. For example, according to RBUL estimates, the positive carbon balance for our forests is only 600 million tons per year, and according to VNIILM estimates, it is already 2 billion tons. That is, almost 3.5 times more. Moreover, according to this method, now Russian forests compensate for 80 percent of the country's industrial emissions, and in 25 years this will already be 100 percent. But so far the VNIILM method has not been approved by the Ministry of Natural Resources and is not official.

Now a methodology is being developed at the Institute of Global Climate and Ecology, which may take into account that, for example, Russia's forest reserves according to the state forest register are seriously underestimated. This has recently been confirmed by data from the state forest inventory.

It will probably be very difficult to convince Western partners that our new version of the calculations is correct. Although, it would seem, science should decide everything. Formulas are impartial.

Andrey Ptichnikov: The carbon balance for all countries is calculated using more or less uniform IPCC methods. But as they say, the devil is in the details. In our case, this is an underestimation of forest reserves by 25-30 percent, as shown by the inventory. But in the calculations, you can take the figure to the maximum, or you can take the minimum. Given the enormous scale of our forestry, the difference is very significant.

But if the EU refused to include forest in its carbon tax at all, then what can we expect, even by proposing a new methodology for calculating emissions and removals?

Andrey Ptichnikov: It's not that simple here. Europe has clearly stated that the carbon tax will be introduced. But how exactly will it work? So far, the EU has not finally expressed itself. And we have the opportunity to influence their position. Negotiations will begin this year. Our forests will have a chance only by implementing forest-climatic projects (LCP), which I have already mentioned.

According to international estimates, our forests, which are called the lungs of the planet, absorb only 25 percent of all emissions in the country.

What is their essence? Quite simply, the scheme is something like this. Suppose you are a metallurgist, you sell steel to the EU, and your carbon dioxide emissions exceed the limit. For excess, you will have to lay out a tidy sum every year. So, you can lease some area of the forest and invest, say, in its restoration, caring for it, in a modern system of preservation from fires and pests, etc. And if, say, in the forests you lease earlier in a year, fires covered 100 thousand hectares, and you managed to reduce this figure to 10 thousand hectares and you improved other indicators of forestry, then it means that the absorption of greenhouse gases by "your" forests increased. And you can qualify for a carbon tax cut on your steel. And perhaps even to zero. According to experts, Russian paintwork products have a huge potential to reduce greenhouse gas emissions: up to 40-45 percent among all other options.

Source: https://rg.ru/