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 its territory, including the exclusive economic zone of the Arctic Ocean. To understand and examine trends, we monitor new legislation, the plans of industry, the Northern Sea Route, international economic sanctions, accidents, and emergencies in the Russian Arctic, as well as provide commentary on the news. Subscribe to our mailing list to make sure you don’t miss the next digest.

Our previous monthly highlights for June can be found here. 

In this issue:

ENVIRONMENTAL AND CLIMATE ISSUES IN THE RUSSIAN ARCTIC
1. Air temperatures in the Russian Arctic last fall were 1.96°C above normal
2. The head of Vostokgosplan, Mikhail Kuznetsov, stated that more than 40% of buildings in the permafrost zone have already been damaged

HEIGHTENED INDUSTRIAL ACTIVITY IN THE RUSSIAN ARCTIC
3. The Russian government has approved an updated Strategy for the development of the mineral resource base until 2050 with classified plans and targets
4. A Chinese company has joined the project to develop a lithium deposit in the Murmansk region

INTERNATIONAL SITUATION IN THE ARCTIC AND SANCTIONS AFFECTING RUSSIAN ACTIVITIES IN THE ARCTIC REGION
5. The US Department of Defense noted the growing cooperation between Russia and China in the Arctic
6. NOVATEK reduced the planned capacity of Murmansk LNG by a third
7. Arctic LNG 2 loses partners, but continues construction of a second gas liquefaction line
8. The London Non-Ferrous Metals Exchange has imposed a ban on nickel supplies from the Norilsk Nickel plant in Finland

NORTHERN SEA ROUTE AND SHIPPING
9. On July 1, a ban on the use and transportation of heavy fuel oil in the Arctic waters came into effect
10. It is predicted that by 2100 year-round navigation along the NSR will be possible
11. The shipment of Russian oil from Baltic ports along the NSR to Asia continues for the second year
12. On July 28, the first cabotage voyage this year departed from Arkhangelsk
13. The head of Rosneft announced plans of Russia and China to create a joint tanker fleet
14. On July 1, 2024, China organized regular monitoring of ice conditions in the waters of the Northern Sea Route
15. Two Chinese container ships set sail along the NSR from China to Europe
16. Swiss shipping company MSC Mediterranean Shipping Company has confirmed its commitment not to use Arctic route
17. Russia and India are ready to cooperate on the development of maritime transport along the Northern Sea Route
18. Fleet to ensure cargo flow on the Northern Sea Route falls short by 53%
19. Cargo turnover of Russian Arctic ports in the first six months of 2024 decreased by 4.7%

ACCIDENTS AND EMERGENCIES IN THE RUSSIAN ARCTIC

Environmental and climate issues in the Russian Arctic

Air temperatures in the Russian Arctic last fall were 1.96°C above normal ↑

In July, Roshydromet published an annual review of the state and pollution of the environment in the Russian Federation for 2023. Among other things, the collected statistics showed that average temperatures in the Russian Arctic last year exceeded the corresponding values of previous years. The largest temperature anomaly was recorded in the fall of 2023 and amounted to +1.96°C. The temperature anomaly in winter was +1.62°C, and in summer – +0.93°C.

In addition to climate observations, the review provides data on environmental pollution. According to these data, surface freshwater in the Murmansk region is among the most polluted in Russia. For many years, compounds of nickel, iron, copper, manganese, molybdenum, mercury, and aluminum have remained characteristic pollutants in the waters of small rivers of the Kola Peninsula. In 2023, 90 cases of high and 34 cases of extremely high levels of water pollution were recorded in some of these rivers. Such pollution is observed consistently year after year due to the constant discharge of wastewater from industrial enterprises and housing and communal services, combined with the low self-purification capacity in Arctic conditions.

The head of Vostokgosplan, Mikhail Kuznetsov, stated that more than 40% of buildings in the permafrost zone have already been damaged ↑

The head of the Federal Autonomous Scientific Institution Vostokgosplan, Mikhail Kuznetsov, in an interview with Rossiyskaya Gazeta, stated that by 2050, potential losses from the thawing of permafrost, which occupies 65% of the territory of Russia, could amount to 7 to 11 trillion rubles (70-110 billion EUR). In the Arctic zone, air temperatures have increased by almost 2° C over the past 50 years . With such trends, by the end of the century, 30% to 85% of the upper permafrost layers may melt, leading to subsidence and deformation of buildings and infrastructure.

According to estimates by Vostokgosplan and Moscow State University, the share of buildings at risk of deformation is 80% in Vorkuta, 55% in Magadan, 50% in Amderma, 35% in Dikson, 22% in Tiksi, 10% in Norilsk.

However, information about the state of permafrost is very outdated. The last comprehensive document is the geocryological map of the USSR, which reflects the situation in the 1980s. In November 2023, the Russian government approved a resolution to create a background permafrost monitoring system to track the dynamics of permafrost conditions in different regions.

Heightened industrial activity in the Russian Arctic

The Russian government has approved an updated Strategy for the development of the mineral resource base until 2050 with classified plans and targets ↑

In 2024, the Russian government approved an updated strategy for the development of the mineral resource base of the Russian Federation until 2050. The previous strategy was approved in 2018 for the period until 2035. The new document names the Arctic, along with the Far East, as a priority development area and envisages “an accelerated expansion of the mineral resource base to meet the growing demand for minerals, primarily those necessary for the implementation of high-tech projects in key industries.”

The strategy emphasizes the priority of geological exploration to search for scarce types of strategic mineral raw materials (such as manganese, uranium, chromium, titanium, tungsten, etc.), the accelerated licensing of such deposits, and the stimulation of their development.

According to Chairman of the Government, Mikhail Mishustin, who accompanied the approval of the strategy, “it is important to fully meet the current and future needs of the economy for strategic types of solid minerals, while significantly reducing dependence on foreign supplies. First of all, manganese, chromium and titanium.”

In the new version of the strategy, unlike the previous one, there are hidden pages – section 3 and all three appendices in the official published text are marked as “for official use”.

Bellona’s comment:

«The updated strategy has become secretive – the third section and all appendices in the new version are marked as intended “for official use” and are not published in the public domain.

Presumably, the hidden section describes trends in the consumption of mineral resources, considering various scenarios for the development of the world and Russian economies (as this section was titled in the previous version of the strategy, and the general structure of the document has remained the same. The appendices likely contain forecast (target) indicators of mineral extraction. This data is now classified.

In addition, environmental tasks such as the reproduction and protection of groundwater and reducing the negative impact of subsoil development on the environment have disappeared from the strategy’s objectives. Only those tasks remain that increase the volume and efficiency of resource extraction remain»

A Chinese company has joined the project to develop a lithium deposit in the Murmansk region ↑

The Polar Lithium company, a joint venture of Norilsk Nickel and Rosatom, has entered into an agreement with the Chinese company MCC International Incorporation Ltd to study the properties of ore at the Levozersky lithium deposit, develop technology for its enrichment and production of lithium products. It is planned that by 2030, a mine, a processing plant for the extraction and enrichment of about 2 million tons of ore per year, as well as a chemical and metallurgical plant with a capacity of 45 thousand tons of lithium hydroxide and carbonate, will be built and put into operation by 2030.

Bellona’s comment:

«Apparently, the Russian side does not have enough financial resources, technology, or guaranteed buyers to develop the lithium deposit, since it has to involve Chinese companies in the extraction of this strategic raw material, as Rosatom representatives have repeatedly called it»

International situation in the Arctic and sanctions affecting Russian activities in the Arctic region

The US Department of Defense noted the growing cooperation between Russia and China in the Arctic ↑

On July 22, 2024, the US Department of Defense published a new Arctic Strategy, that describes the current situation in the Arctic in terms of potential risks to American security.

“The Arctic region is undergoing rapid changes, both strategic and physical. The People’s Republic of China (PRC), which remains a challenge to the Department of Defense, is seeking greater access and influence in the Arctic, while Russia remains a pressing threat in the region despite its losses in Ukraine. Increasingly, these two competitors are collaborating in the Arctic, with security implications for the United States and our allies and partners,” the strategy states.

Officials from China and Russia immediately responded to the US Department of Defense’s message, stating that both countries are committed to ensuring stability and peace in the Arctic region. On the same day, the Portnews portal published news that Russia could create a tanker fleet for use on the Northern Sea Route in cooperation with Chinese shipyards and component suppliers. According to Rosatom’s calculations, by 2030, NOVATEK’s projects will require 39 gas carriers and tankers, Gazpromneft – 7 tankers, Norilsk Nickel – 6 tankers and container ships, Severnaya Zvezda – 25 bulk carriers, Baimskaya mining company – 3 bulk carriers, Rosneft – 11 tankers, Rosatom – 9 container ships, as well as 10 universal vessels for northern delivery.

NOVATEK reduced the planned capacity of Murmansk LNG by a third ↑

Russian media, which received the design documentation for the Novatek liquefied natural gas plant in Murmansk before its publication for public comment, report that the planned capacity of the plant has been reduced compared to original plans from 20.4 to 13.6 million tons of LNG per year, and instead of three, only two liquefaction lines are planned. Novatek representatives did not comment on the reasons for the reduction in plans.

Arctic LNG 2 loses partners, but continues construction of a second gas liquefaction line ↑

On July 8, 2024, it became known that the Chinese vessel “Wei Xiao Tian Shi” with modules for the third line of the Arctic LNG 2 project turned around before reaching Russia and was heading back to China. This happened after the Chinese company Wison New Energies, which produced equipment for Arctic LNG 2, announced the suspension of activities in Russia due to the threat of secondary US sanctions.

Meanwhile, on July 25, NOVATEK began transporting the second line for Arctic LNG 2 from Murmansk to the Gydan Peninsula. Construction of the second line of the plant was completed despite sanctions from the United States and other countries.

At the same time, according to the Bloomberg news agency , Arctic LNG 2 in June 2024 reduced gas processing to the minimum since February. An unnamed source reported that 8 million cubic meters of natural gas were processed in June, which is two times less than in May of this year.

The London Non-Ferrous Metals Exchange has imposed a ban on nickel supplies from the Norilsk Nickel plant in Finland ↑

The London Non-Ferrous Metals Exchange has suspended supplies of nickel from the Norilsk Nickel Harjavalta plant in Finland, owned by the Russian Norilsk Nickel, whose products continue to be sold despite Western sanctions against Russian metal. New supplies of nickel cathodes and briquettes from the company’s Finnish plant will be prohibited from October 3.

Bellona’s comment:

«The international situation around Russian Arctic resources remains stable. The very slow and gradual tightening of sanctions by the EU and G7 countries against Russian enterprises and industries allows the Russian side to try workarounds and quite successfully adapt to the new situation, albeit with some loss of profit, which means curtailing unnecessary environmental and social programs to reduce costs and the impossibility of adequate public control due to many operations in the extraction, transportation and sale of resources being hidden.

This adaptation occurs because some large and economically strong countries (primarily China) do not join the sanctions and continue trade and investment cooperation with Russia, although keeping an eye on the risk of secondary sanctions. In the long term, this could lead to environmental and social degradation in Russia, as well as a strong dependence of the Russian economy on China»

Northern Sea Route and shipping

On July 1, a ban on the use and transportation of heavy fuel oil in the Arctic waters came into effect ↑

A voluntary agreement on banning the use and transportation of heavy fuel oil (HFO) in the Arctic waters, developed by the International Maritime Organization (IMO), came into effect. The agreement will be fully enforced by 2029.

The restrictions introduced on July 1, 2024 aim to reduce emissions of black carbon, sulfur dioxide and other toxicants resulting from the combustion of HFO in ship engines, as well as to reduce the risk of marine pollution with heavy oil fractions in the event of ship accidents.

The only Arctic country that did not join the agreement and did not voice its own plans to ban HFO in the Arctic is Russia.

You can read more about the ban on the use and transportation of HFO in the Arctic in the Bellona article.

It is predicted that by 2100 year-round navigation along the NSR will be possible ↑

The journal Nature published an article by Chinese researchers who predict that by 2100, it will be possible to organize year-round shipping along the NSR. This conclusion was made based on an analysis of climate models and their impact on ice cover and navigation in the Arctic.

The shipment of Russian oil from Baltic ports along the NSR to Asia continues for the second year ↑

On July 21, the first oil tanker of this navigation season, named “Viktor Bakaev”, which is under direct US sanctions, loaded in Primorsk and set off for China along the NSR. Until 2023, all oil tankers leaving the Baltic ports went through Europe and the Suez Canal. In total, in 2023, 14 shipments with a total volume of about 11 million barrels of oil were transported from the Baltic ports to China. This year, the volume of non-Arctic oil transportation along the Northern Sea Route is planned to increase significantly.

On July 28, the first cabotage voyage this year departed from Arkhangelsk ↑

The first cabotage voyage (voyages carrying goods or passengers between two or more points) along the Northern Sea Route in 2024, subsidized by the Ministry of Eastern Development, departed from Arkhangelsk on July 28. The “Lady D” vessel with 6 thousand tons of various goods is travelling along the route Arkhangelsk – Pevek – Korsakov – Nakhodka – Magadan – Petropavlovsk-Kamchatsky – Pevek – Murmansk. A total of 3 subsidized cabotage voyages are planned in 2024, same number that it was in 2023.

The head of Rosneft announced plans of Russia and China to create a joint tanker fleet ↑

According to the head of Rosneft, Igor Sechin, to RIA Novosti, a tanker fleet capable of crossing ice is needed for work on the Northern Sea Route. Such a fleet can be built in cooperation with Chinese shipbuilders and component suppliers.

On July 1, 2024, China organized regular monitoring of ice conditions in the waters of the Northern Sea Route ↑

Reuters news agency, citing the Chinese local newspaper Tianjin Daily, reports that as part of China’s planned use of the passage along the Northern Sea Route, the weather forecast at the radio station in Tianjin in Northern China has included a regular warning about ice conditions for Chinese ships following the NSR from July 1, 2024.

Two Chinese container ships set sail along the NSR from China to Europe ↑

In July, two Chinese container ships Xin Xin Hai 1 and Xin Xin Hai 2, a week apart, began their voyage from China to Europe along the NSR. The first ship is accompanied by the icebreaker Sibir. The vessels are operated by New New Shipping Line, which began operating in the Arctic last summer with seven voyages between July and December.

In addition to these two vessels, container ships Flying Fish 1, SFT Turkey and SFT Egypt, owned by Hong Kong-based Safetrans Line, have also received permission to sail on this route.

Swiss shipping company MSC Mediterranean Shipping Company has confirmed its commitment not to use Arctic routes ↑

Swiss shipping giant MSC Mediterranean Shipping Company in July 2024 confirmed its commitment, stated in 2019 and 2021, to refrain from sending its ships through the Arctic due to climate and environmental reasons. Amid intensifying discussions about alternative shipping routes to the Suez Canal, one of the largest shipping companies believes that using the Arctic for shipping is unsafe.

“Arctic waters are extremely difficult to navigate due to ice, weather conditions, lack of necessary charting information and limited infrastructure, ” said MSC Executive Vice President Bud Darr. “ Search, rescue and pollution response capabilities are far away, and despite developments and cooperation in this area, our ships and crews will be more or less on their own. MSC will not use the Northern Sea Route as a shipping line, and we believe this is a position the entire shipping industry should take.”

Russia and India are ready to cooperate on the development of maritime transport along the Northern Sea Route ↑

Following the visit of Indian Prime Minister Narendra Modi to Russia on July 8-9, 2024, a joint statement between Russia and India on cooperation in the Far East and the Arctic was published. It also emphasizes that Russia and India encourage cooperation in the development of maritime transport between countries along the Northern Sea Route and that for these purposes they expressed their readiness to create a joint working body for interaction while using the Northern Sea Route.

Fleet to ensure cargo flow on the Northern Sea Route falls short by 53% ↑

The Kommersant published data from the presentation of the national project “Efficient Transport System”, which reported a 53% shortage of fleet to ensure cargo flow on the Northern Sea Route in 2024. According to the document, by 2024, 57 vessels are required to fulfill the plan for cargo traffic along the NSR, of which 47% are available. In 2030, the gap between the available and required fleet will widen further: of the 160 required vessels, only 45% are confirmed.

At the same time, by 2023 the fleet supply is fixed as full. At that time, 30 vessels were operating on the Northern Sea Route, including 17 NOVATEK gas carriers and tankers, seven Gazpromneft oil tankers and six Norilsk Nickel vessels. In 2024, the Northern Sea Route Directorate expected the Arctic fleet to be replenished with 16 tankers for NOVATEK, nine bulk carriers for transporting Severnaya Zvezda coal and two oil tankers for Vostok Oil.

But NOVATEK’s Arctic LNG 2 project is subject to US sanctions, which is why it cannot receive six ships ordered from the South Korean shipbuilding company Hanwha Ocean. Of the 15 tankers being built for NOVATEK at the Zvezda shipyard, five were supposed to be delivered to the company in 2024, but the delivery date was repeatedly postponed. None of the 16 bulk carriers for Severnaya Zvezda, also subject to US sanctions, had been ordered as of the end of 2023.

Analysts believe that a possible solution to the problem is to involve the fleet of “friendly” countries, such as China and India, in transportation, but their ice-class fleet is also limited today.

Cargo turnover of Russian Arctic ports in the first six months of 2024 decreased by 4.7% ↑

According to the Association of Commercial Sea Ports, cargo turnover of seaports of the Arctic Basin for the period January-June 2024 decreased by 4.7% – to 47.2 million tons. The volume of dry cargo transshipment amounted to 12.7 million tons (-14.6%), liquid cargo – 34.4 million tons (-0.4%).

Cargo turnover of the port of Murmansk decreased by 10.5% to 27.3 million tons, the port in Varandey – by 2.6% to 2.6 million tons. Cargo turnover of the ports of Sabetta and Arkhangelsk, on the contrary, increased by 6.4% (up to 14.7 million tons) and 40.6% (up to 1.2 million tons), respectively.

Bellona’s comment:

«The navigation season along the Northern Sea Route opened in July, and most likely it will not bring a significant increase in cargo turnover compared to last year. Chinese transit will remain at last year’s levels, as will domestic cabotage traffic. The main shipping volumes, which are ensured by the export of mining products from the Russian Arctic, will also not experience a significant increase due to sanctions on Arctic LNG 2.
The second aspect that needs attention is the emergence of a shadow fleet for the export of LNG and the continued use of a shadow fleet for the export of oil. The practice of turning off the tracking system on shadow fleet vessels, as well as the condition of the vessels themselves, increases the risk of serious environmental pollution in the event of accidents. Their use will also distort statistics on shipping along the NSR
»

Accidents and emergencies in the Russian Arctic ↑

In July, the following accidents and emergencies leading to environmental pollution came to the attention of the media:

• The ongoing forest fires in Yakutia have already destroyed about 2 million hectares of forest, including in the Arctic zone.
• The Lukoil company hid from the authorities and residents of the Nenets Autonomous Okrug an oil pipeline break in the area of the Tedinskoye field.
• On July 1, contamination of the Kola Bay and the Tuloma River was discovered; the concentration of petroleum products was found to be 400 times higher than the maximum permissible concentration in the water; the area of the spill was 2.7 km² . A criminal case has been opened regarding the pollution; the culprit has not yet been found.
• On July 26, an explosion and fire occurred at the natural gas and condensate treatment plant at the East Urengoy field in the Yamalo-Nenets Autonomous Okrug, resulting in one death and eight injuries.
• Residents of the Chukotka city of Bilibino complain about water pollution in the Karalveem River caused by waste from the gold mining enterprise JSC Rudnik Karalveem.