Moscow Exchange discusses trading in carbon units

Photo from: JSC NovaWind

Regulators, bidders and business representatives discussed the prospects of the carbon units market in Russia. As a reminder, the Registry of the Russian Carbon Units Market was launched on 1 September 2022. And on September 26, the first transaction took place — there were auctions, which resulted in two sales transactions with a total volume of 20 carbon units for 20 thousand rubles.

To date, no similar auctions have taken place, and experts are not yet ready to predict when they will take place again. Although new climate projects have not yet been registered, negotiations are ongoing. Oksana Gogunskaya, Director General of Kontur JSC (the operator of the register of carbon units), told the panelists about this.

Larisa Selyutina, Director of the Financial Market Infrastructure Department of the Bank of Russia, noted that we need to assess demand, supply and price formation for carbon units, but the main thing is to attract as many participants as possible.

“They have to understand that they need it. Russia is serious about climate projects. Depending on how many companies show up among the bidders, we will see how focused they are on making the environment in our country more transparent and cleaner,” said Selyutina.

“The demand for this commodity is quite active. On the one hand, everyone understands that only the first deal, the first sale has taken place, and this is a kind of test. And companies that follow the low-carbon agenda want to see what kind of instrument it is, how easy it is to buy it in exchange trading,” said Nikita Zakharov, director of the National Commodity Exchange. According to him, the difficulty today lies in assigning a starting price for carbon units by the owner, because this is a new commodity for our country.

However, barriers to trade remain, one of which is the issue of taxation. Today it is unclear whether carbon units are property or a property right. “This uncertainty, we hope the regulator will remove, because inaccurate, incomplete understanding of accounting is a barrier to trade development,” said Levon Hayrapetyan, head of Tax Policy at the Centre for Strategic Research.

Incidentally, one way to create carbon units in the foreseeable future could be to grow forests.

Cover photo: DPA