“Businesses that pay attention to energy efficiency are entitled to preferential treatment”

Photo by: skynesher / iStock

The domestic regulatory framework contains a number of preferences for enterprises using energy efficient equipment. In particular, Russian government decree No. 600 of 17 June 2015 approved a list of high energy efficiency facilities and technologies. Companies using such equipment or materials are entitled to accelerated depreciation, a tax credit and an exemption from taxation for three years. The relevant provisions are contained in the Tax Code.

The list includes, on the one hand, facilities and technologies that are a priori energy efficient regardless of the characteristics of the facilities (e.g., equipment for utilization and reuse of secondary gases in metallurgy, steam and heat energy; solar panels and wind turbines; heat pumps, frequency drives and other types of equipment), and on the other hand, facilities and technologies that must pass a certain threshold in performance to be considered energy efficient. Here as an example it is possible to mention heating water boilers with efficiency not less than 94%, compressors with efficiency not less than 87%, steam turbines with consumption of fuel equivalent not more than 275 grams per kWh of energy production and so on. Thresholds have been developed for different types of equipment.

It is important that this list is regularly updated — the updating procedure and compliance criteria are stipulated by the Russian government’s Decree No. 305 of March 3, 2021. The decision is made by the Russian Ministry of Industry and Trade based on the conclusion of the Technical Committee for Standardization TC 039 “Energy Saving, Energy Efficiency, Energy Management” acting on the basis of the NOE (National Association of Organizations in the Field of Energy Saving and Energy Efficiency).

As a result, all Russian enterprises that use such equipment are entitled to the aforementioned tax incentives, which, in turn, contribute to improving the operational performance of enterprises, renewing the technological fleet, as well as reducing pollution and greenhouse gas emissions.

Cover photo: SeventyFour / iStock