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Ex-PM: Russian companies will need support measures if EU introduces carbon tax

The European Union's initiative may entail billions of euro losses for Russian companies, according to Deputy Head of the Russian Security Council Dmitry Medvedev
Deputy Head of the Russian Security Council Dmitry Medvedev Yulia Vlasova/POOL/TASS
Deputy Head of the Russian Security Council Dmitry Medvedev
© Yulia Vlasova/POOL/TASS

MOSCOW, August 26. /TASS/. Russian authorities will provide support measures for domestic companies in case the European Union introduces a carbon tax and will hold international negotiations on this matter, Deputy Head of the Russian Security Council Dmitry Medvedev told a meeting on ensuring Russia’s long-term interests in the context of the introduction of a carbon tax in the EU from 2025 on Wednesday.

"There is a need to think of how to support the most vulnerable industries and branches in case such decisions come into force: to support both inside the country and probably by external response measures," he added.

Such a mechanism at the EU level "if introduced without any restrictions and comments will run counter to norms of effective international agreements, including the UN framework climate convention, which prevents using climate change control activities to limit international competitiveness," Medvedev said. Russia needs to hold "talks in the bilateral format with the EU and at relevant international platforms," including WTO, he added.

Russia is currently developing a legislative framework for regulation of greenhouse gas emissions and will "update national approaches to such products so that they are recognized, including at the international level," Medvedev noted.

'Hidden protectionism under a plausible pretext'

The EU carbon tax is a "hidden protectionism under a plausible pretext" that will prevent the access of Russian goods to the European market, Dmitry Medvedev said.

 "According to the Academy of Sciences, the financial losses of domestic exporters will amount to billions of euros. This figure is still impossible to calculate in full, of course, but we are talking about very significant shortfalls in income," he stated.

"This carbon tax can dramatically increase the competitiveness of goods from European countries in relation to other states, including our country. In fact, this is hidden protectionism, albeit under a very plausible pretext, which will hinder the access of our goods to the European Union market," Medvedev added.

The new mechanism will become part of the new European law on climate, which should be adopted in 2021 and fully introduced as early as in 2025, Medvedev said. He added that according to his European colleagues, this measure will help to achieve the main goal of the Paris climate agreement - to keep the growth of the global average temperature within 1.5-2 degrees Celsius.

But despite the fact that many countries, including Russia, had ratified the Paris Agreement, the desire of European partners to introduce a carbon tax under the guise of a climate agenda already caused concern in a number of states, which are export oriented in their supplies, he noted.

Medvedev specified that Germany is "very restrained" about that initiative, while the United States and China also took this prospect "without enthusiasm."

"For the Russian economy <...> this will have very serious consequences, our basic industries, such as ferrous and non-ferrous metallurgy, the chemical industry, energy, may suffer, and due to such cross-border regulation, the consumption of Russian oil and Russian coal may also be significantly reduced," Medvedev concluded.

The European Commissioned launched the Green Deal project in December 2019, aimed at a transition to a more eco-friendly life in the European Union. Transition to the economy with zero carbon emissions is planned by 2050 but there are no specific calculations by now how to implement this in practice. One of the measures within the Green Deal framework is to impose a carbon duty on import of goods.