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Publish date: March 29, 2024
News
Ensuring complete and reliable access to environmental information in Russia has never been fully guaranteed. Following the Russian invasion of Ukraine on February 24, 2022, it became even more difficult. Some information ceased to be published altogether, such as daily oil production data and annual reports from certain industrial companies. Independent environmental organizations have been banned or closed.
The Arctic region plays a crucial role in comprehending the process of global climate change. Russia owns approximately one-third of this territory, including the exclusive economic zone of the Arctic Ocean. To understand and examine trends, we monitor new legislation, plans of industrial companies, the Northern Sea Route, international economic sanctions, accidents, and emergencies in the Russian Arctic, as well as provide commentary on the news.
Our previous monthly highlights for January can be found here.
On February 1st, a bill was introduced to the State Duma proposing a ban on the operation of old worn-out oil pipelines
The bill suggests limiting the possibility of extending operation period of old pipelines to only once. This will hinder the use of deteriorating oil pipelines and potentially incentivize investments in the depreciation funds of enterprises.
The explanatory note to the bill notes that oil companies often operate pipelines laid in Soviet times, and the age of some of them is completely unknown. The absence of restrictions on the number of industrial safety assessments allows obtaining a positive conclusion an unlimited number of times, which, combined with corruption, leads to the degradation of pipelines and accidents. For example, according to the prosecutor’s office of the Khanty-Mansi Autonomous Okrug, almost all ruptured oil pipelines in the region had a positive conclusion of the last assessment.
Bellona сomment: This bill was introduced to the State Duma by a member of the Russian Communist Party from the Komi Republic, which underscores the scale of the oil spill problem for the region. It was developed with the involvement of the independent environmental organization Committee to Save the Pechora, which, together with Greenpeace Russia (before its closure), has been trying to promote this initiative for 8 years.
Pipeline ruptures in Komi occur regularly, and 90% of them are associated with pipe wear. Moreover, the majority of oil spills (up to 70%) are concealed and do not appear in the reports of either Rosprirodnadzor or the media. However, this is not just a problem in Komi. According to official data for the whole of Russia, there are annually from 8 to 12 thousand accidents on oil pipelines.
Despite the potential benefits of this initiative for the environment, there is no certainty that the bill will be adopted. According to statistics, the majority of bills introduced to the Duma by members of the Communist Party are rejected.
The new environmental movement “Arctic Volunteer” was established in 2023 by the Russian Geographical Society (RGS) as part of the youth environmental and social project “Arctic. Big Cleanup” with the support of the Presidential Grants Fund. The description of the movement states that “it gives young Russians the opportunity for self-realization and career growth, a chance to participate in the socio-economic life of Arctic regions and solve complex and relevant problems.”
Bellona сomment: The creation of a new environmental movement by a state structure is one of the vivid examples of the trend in recent years to replace independent environmental non-governmental organizations with associations controlled by state structures. The goal of this is to show the public, especially young people, what kind of public environmental activity is welcomed by the state (physical garbage collection or tree planting), and which is not, as well as to take control over this activity.
At the same time, while all international independent environmental NGOs, including Bellona, Greenpeace, and WWF, have been expelled from Russia, and local environmental NGOs and movements are constantly under pressure, including closure and administrative or criminal prosecution of employees and activists, it seems like a logical step for the Russian dictatorship to organize active public to engage in activities that are safe for the state under the banner of environmental protection replacing independent initiatives and public control.
Scientists from the Program on New Approaches to Research and Security in Eurasia (PONARS) have studied the impact of climate change on Russia and Russia’s role in global efforts to combat climate change or obstruct climate action. The main findings of the study indicate that Russia is already suffering from various consequences of climate change and is poorly prepared to adapt to them. While the rest of the world is moving towards renewable energy sources, the Russian government, heavily reliant on fossil fuels, is unwilling and unprepared to phase them out, which could potentially benefit the entire Russian society, emphasize the study’s authors.
Development of the Pizhemskoye titanium deposit in the Komi Republic will begin in 2026
Deputy Chairman of the Komi Government Anton Vinogradov announced that the Rustitan Group of Companies plans to launch the first stage of the Pizhemskoye titanium deposit development project in the Komi Republic in 2026.
The deposit is one of the world’s largest in terms of titanium and quartz reserves. Titanium ore reserves are estimated at 7 billion tonnes, while quartz sands are estimated at 1 billion tonnes. The projected investments in its development for the first stage are estimated at 52 billion rubles (EUR 521.2 mln), and for the second stage – 120 billion rubles (EUR 1.2 billion).
Bellona comment: Despite Russia being one of the world leaders in titanium production, the ore for its production was imported from other countries, until 2022 primarily from Ukraine. This legacy of production chains created back in the Soviet era did not stimulate investments in domestic mining until the annexation of Crimea in 2014. Work on the development project of the Pizhemskoye deposit has been ongoing since 2006, but only now, when due to the Russian invasion of Ukraine the supplies of Ukrainian ore have significantly decreased (although they continue through intermediaries), the project has real chances of implementation.
In 2022, another facility, owned by Rosatom, started extraction of titanium ores in the Tomsk region, also within the framework of import substitution of titanium ores to supply the Russian titanium producer VSMPO-Avisma (which produces 90% of Russian titanium and is under US and Canadian sanctions).
The geological features of the Pizhemskoye deposit allow for open-pit mining, which will inevitably lead to degradation of natural landscapes and pollution of surface waters. Ore processing is planned in the Ukhta region at ore dressing and chemical-metallurgical plants using chlorine and hydrochloric acid. In addition, there is a plan of construction of the Sosnogorsk – Indiga port railway, with a length of 559 km through the Komi and Nenets Autonomous Districts, using convict labor.
Novatek, through its subsidiary LLC “Arctic LNG-2”, invites construction companies to declare their interest in the construction of a gas power plant on the Gydan Peninsula to support the operation of the planned second and third lines of the Arctic LNG-2 gas liquefaction plant.
Bellona comment: A large gas power plant in the Arctic zone is an additional powerful source of greenhouse gases that will contribute to climate change. However, the extent to which these plans will materialize in the face of escalating economic sanctions against the Arctic LNG-2 project remains unclear.
Novatek tries to optimistically implement the project according to plan, although to date there are no buyers even for the LNG produced on the first line, the second line is likely to be launched with delays if buyers are found, and the construction of the third line has already been suspended. In such conditions, Novatek’s optimism seems like an attempt to convince potential buyers from Asia that the economic situation on the project is stable, although in reality, this is no longer the case.
In February, the USA, the United Kingdom, the EU Council, Canada, Japan, and Australia imposed new sanctions in response to Russia’s aggression against Ukraine, timed to coincide with the two-year anniversary of the war
This time, the sanctions were mainly aimed at individuals and legal entities directly or indirectly involved in the activities of Russia’s military-industrial complex, as well as those involved in the abduction and resettlement of Ukrainian children or facilitating it.
Additionally, the list of goods banned for export to Russia due to their potential military use has been expanded. The sanctions also affect third countries to prevent circumvention of previously imposed restrictions, particularly it concerns shadow fleet vessels and traders facilitating the trade of Russian oil to bypass price ceilings.
United Kingdom
On February 22, the UK added 50 companies and individuals to its sanctioned list, including Turkish, Chinese, and Belarusian entities. New targets include ammunition manufacturers, electronics production companies, as well as diamond and oil traders. Among the companies from the Arctic region the updated list includes Novatek’s “Arctic LNG-2″ project and its management, the diamond mining company “AGD Diamonds” in the Arkhangelsk region, members of Novatek’s board of directors, and the management of the diamond company Alrosa.
USA
The new US sanctions list, published on February 23, consists of over 500 companies and individuals, including those operating in the Murmansk Sea Trade Port: Novatek-Murmansk (a subsidiary of Novatek, involved in the construction of large-tonnage marine facilities in the Murmansk region, including parts of the Arctic LNG-2 plant), Sevmorneftegeofizika (the largest marine geophysical company in Russia, a subsidiary of Rosgeologia), “KRDV Murmansk” (a subsidiary of the Ministry for the Development of the Russian Far East, managing company of the Arctic zone and the Far East), “Arctic Marine Engineering and Geological Expeditions” (conducts engineering and geological surveys on the Arctic shelf), as well as “SUEK” (Siberian Coal Energy Company, the largest coal company in Russia).
Furthermore, restrictions were imposed on “Almazyuvelirexport”, the state exporter of diamonds and precious metals, on the subsidiary of Rosatom “Rusatom Arctic,” established in 2023 to assist in the development of the Arctic region, and the state Corporation for the Development of the Far East and the Arctic (KRVD), as well as on the Far Eastern Shipbuilding Complex “Zvezda”, which is currently building 15 tankers for transporting LNG from the Arctic LNG-2 plant. “Zvezda” has been added to the SDN list, which means the inability to use the US dollar for settlements and the risk of secondary sanctions for all counterparties.
European Union
On February 23, the EU adopted the 13th package of sanctions, which included 194 legal and natural persons. This time, the sanctions targeted Russian companies and their executives associated with the defense complex, representatives of judicial and regional authorities, including those who contributed to the abduction and relocation of Ukrainian children. Additionally, foreign companies assisting Russia in circumventing previously imposed sanctions were included in the sanctions list, and the list of goods banned for export to Russia was expanded.
Canada
Canada has added 163 companies and individuals to its sanctions list and imposed a ban on the purchase of Russian diamonds and products containing them.
According to the Barents Observer, Novatek’s 400-meter floating storage facility on the Kola Peninsula has been idle for six months. The vessel “Saam” arrived in the Ura Bay of the Barents Sea at the end of June 2023. It was intended for Novatek’s marine transshipment complex in the Murmansk region. It was planned that ice-class gas carriers would deliver gas from plants in Yamal and Gydan to the storage facility, and regular vessels would then transport it from there to buyers around the world. Based on ship movement data, the “Saam” has been idling in a remote bay since its arrival. It appears that the vessel has not transferred any batches of liquefied natural gas during this time.
According to Reuters, Novatek plans to open an office in China to assist in trading liquefied natural gas in Asia amid sanctions. This move was taken to find customers for LNG from the Arctic LNG-2 project in the face of US sanctions.
On February 7, 2024, the head of the French company TotalEnergies, Patrick Pouyanné, announced during a teleconference dedicated to the results of 2023 that the construction of the third line of the Arctic LNG-2 project has been suspended. TotalEnergies is no longer involved in project management due to the inclusion of the project in US sanction lists.
According to Bloomberg, the tightening of US sanctions is affecting oil trade between India and Russia. Russia remains a key oil supplier to India, but there are signs that Indian oil refineries are seeking to increase purchases from other countries.
Bellona comment: The EU and G7 sanctions pressure on the Russian economy continues to gradually intensify, although, for the most part, it is highly targeted at specific legal or natural persons. In a situation where international business usually utilizes endless chains of offshore firms and subsidiary structures, such tactic is not very effective, especially in the short and medium term.
A more effective way to significantly decrease Russian government income, and therefore limit its capability to fund military operations, is by imposing bans on importing Russia’s main export products like oil, gas, and metals. Additionally, implementing secondary sanctions on companies in third countries that still purchase Russian goods can further contribute to this effort. An example of this approach could involve imposing sanctions on projects like Arctic LNG-2.
Therefore, Bellona has joined an open letter from around 300 European, Ukrainian, and international NGOs to the EU and G7 countries calling for stricter price restrictions on Russian oil, a complete ban on LNG imports, a cessation of imports of oil products from third countries refining Russian oil, more rigorous control over shadow fleet vessels transporting Russian oil, and decisive measures to reduce fossil fuel consumption in their countries.
Following Russia’s invasion of Ukraine in 2022, the German Government on April 4, 2022, transferred the Gazprom Germania group of companies – a subsidiary of Gazprom – under the management of the Federal Network Agency due to the company’s opaque legal relations and its importance to the country’s gas infrastructure. In May of the same year, by decree of the President of the Russian Federation, any transactions with this company were prohibited, which, after coming under the control of the German government, changed its name to Securing Energy for Europe.
As an exception, special permission for transactions to purchase Russian LNG was valid until the end of 2024. On February 9, by the order of Prime Minister Mikhail Mishustin, permission for LNG supplies from the Yamal LNG plant was extended until 2040.
Bellona comment: The search for new buyers of Russian LNG cannot be called successful, and Russia has to cling to the remaining clients in Europe and play by their rules.
Russia suspended its contributions to the Arctic Council, expressing disagreement with its activities, which it believes do not align with Russian interests. The Russian Ministry of Foreign Affairs stated that Russia plans to resume payments after the practical work, such as ecosystem preservation in the Arctic and conducting research, is restored with all council members. There is no talk of Russia leaving the Arctic Council at the moment.
However, on February 6, the Russian Ambassador at Large for the Ministry of Foreign Affairs suggested that Russia could exit the Arctic Council if its activities “do not correspond to Russian interests”.
Representatives from Norway, currently chairing the council, oppose Russia’s exclusion, emphasizing the importance of shared responsibility for addressing Arctic region issues.
Bellona comment: The Arctic Council is an intergovernmental organization of Arctic states founded in 1996, consisting of Russia, Norway, Denmark, Iceland, Canada, the United States, Finland, and Sweden, as well as representatives of Arctic indigenous organizations.
In response to Russia’s invasion of Ukraine in February 2022, Arctic Council countries refused to participate in meetings and joint projects with Russian officials. In March 2023, Russia changed its approach to cooperation in the North and removed any mention of the Arctic Council from its Arctic State Policy Foundations until 2035.
The suspension of payments is another political step by Russian authorities to distance themselves from Western countries, similar to their withdrawal from the Council of Europe, which was also preceded by the suspension of contributions. The refusal to make payments will not significantly affect the council secretariat’s work or project activities, which are funded by other sources, except for the possibility of implementing projects directly in the Russian Arctic with Russian participants, which is not currently happening anyway.
In this situation, it would be wise for other council members to focus on the remaining two-thirds of the Arctic territory, including both scientific research and the development of joint policies to limit pollution and factors influencing climate change.
65% of companies operating on the Northern Sea Route have zero transparency levels of environmental information
The Institute of Geography of the Russian Academy of Sciences conducted a study which revealed that out of 31 shipping companies operating on the Northern Sea Route, only two have a sufficient level of transparency of environmental information: Atomflot and the Far Eastern Shipping Company. Both companies belong to the Rosatom State Corporation and together manage 63 vessels (7% of the total number of vessels that entered Arctic waters under the Russian flag in 2022).
Bellona comment: In our January digest, we wrote that Russia topped the Top 10 list of countries with the largest number of vessels in the Arctic zone. According to the Arctic Council report, vessels under the Russian flag make up approximately half of the fleet operating in the Arctic. Of these, 93% belong to companies that do not publish reports on their environmental impact.
And those two companies that do publish reports do not show detailed statistics on emissions, in particular, they do not separate data on emissions of pollutants and greenhouse gases from stationary and mobile sources.
In February, two local environmental accidents were covered in the media: an oil spill in the Komi Republic at the facility owned by Lukoil-Komi, which could lead to oil products entering a stream, and pollution with coal dust in Murmansk due to coal transshipment at the Murmansk Commercial Port.
Companies of the timber industry holding “Segezha Group” were conducting continuous logging within the boundaries of planned protected natural areas in Karelia, namely “Maksimyarvi”, “Zaonezhsky”, “Kuzharvi”, “Lake Nyuk”, and “Vygozersky-2” (the last two territories are located in the Arctic zone). Representatives of the scientific community and environmental organizations noted that logging has disturbed at least 5 animal habitats and 29 sites of plant and fungal growth listed in the Red Books of Russia and Karelia. The share of the area occupied by protected natural areas in Karelia is twice as low as in neighboring regions of Northwestern Russia (5.6% compared to 11.2% in the Arkhangelsk region and 13.5% in the Murmansk region).
Russia is formally withdrawing from a landmark environmental agreement that channeled billions in international funding to secure the Soviet nuclear legacy, leaving undone some of the most radioactively dangerous projects and burning one more bridge of potential cooperation with the West.
While Moscow pushes ahead with major oil, gas and mining projects in the Arctic—bringing more pollution to the fragile region—the spoils of these undertakings are sold to fuel Russia’s war economy, Bellona’s Ksenia Vakhrusheva told a side event at the COP 29, now underway in Baku, Azerbaijan.
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