News

Monthly Highlights from the Russian Arctic, January 2024 

Frozen methane in Siberia. Photo: flickr.com/photos/felton-nyc
Frozen methane in Siberia. Photo: flickr.com/photos/felton-nyc

Опубликовано: 21/02/2024

Автор: Bellona

In this news digest, we monitor events that impact the environment in the Russian Arctic. Our main focus lies in identifying the factors that contribute to pollution risks and climate change.

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 worse. Some information ceased to be published altogether, for instance, daily oil production data and annual reports from certain industrial companies. Independent environmental organizations had been banned or closed. 

The Arctic region plays a crucial role in comprehending and overseeing global climate change process. Russia owns approximately one-third of this territory, including the exclusive economic zone of the Arctic Ocean. To understand and show the 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. 

1. Environmental issues in the Russian Arctic 

The scientific isolation of Russia is having an extremely detrimental impact on climate and environmental research in the Arctic 

A study published in the journal Nature Climate Change on January 22, 2024, confirms that the absence of data from Russian research stations in the Arctic has created a significant information gap for Western scientists. The primary role of the Arctic Council in providing knowledge to national governments and the international community has been questioned since the Russian invasion of Ukraine. By excluding Russia from the Arctic monitoring system, the accuracy of global climate models will be compromised. The dynamics of the taiga zone and the degradation of permafrost cannot be properly accounted for without the data from the 17 Russian stations. 

The Arctic needs updated environmental standards 

The Krasnoyarsk Scientific Centre of the Siberian Branch of the Russian Academy of Sciences recently hosted a round table discussion titled “Large Scientific Expedition: Results and Prospects,” which was based on the findings of the Arctic expedition that took place from 2022 to 2023 with financial backing from Norilsk Nickel. The participants of the round table reached the conclusion that the Arctic region of Russia must establish new environmental standards, as the current ones are outdated. 

One illustrative example is the Kola Bay, where numerous cities and enterprises continue to discharge untreated wastewater into the bay. Presently, there is no precise data on the quantity of wastewater being released into the Kola Bay. The most heavily polluted area is believed to be near Murmansk, where wastewater treatment facilities are only operational in the northern part of the city. Insufficient funding and outdated guidelines regarding acceptable discharge level in water bodies hinder the construction of additional facilities in this region. 

Kola Bay. Credit” commons.wikimedia.org/wiki/User:Insider

The increasing methane emissions from the Arctic shelf pose a threat to the global climate 

In an interview with the publication “Arguments and Facts” on January 17, 2024, Igor Semiletov, a Russian scientist and the head of the Arctic Research Laboratory at the Pacific Oceanological Institute of the Far Eastern Branch of the Russian Academy of Sciences, discussed the preliminary findings of a study conducted in the seas of the Far East and the Pacific sector of the Arctic, which was concluded in December 2023. 

According to Semiletov, the underwater permafrost of the Arctic shelf contains a significant amount of methane combined with water molecules, known as gas hydrate, which is released due to a phase transition triggered by the warming of the ocean. The estimated methane potential of the Russian Arctic seas’ shelf exceeds one trillion tons, and its release can have a substantial impact on climate warming. Releasing just 5% of the estimated methane reserves from the Arctic shelf could lead to a 2-3C increase in global air temperature within a decade. 

Bellona comment: Anthropogenic emissions causing climate warming have a direct impact on natural processes, including the stimulation of methane release from the eastern Arctic seas’ shelf. This, in turn, can intensify the greenhouse effect and accelerate the process of global warming. 

2. Heightened Industrial Activity in the Arctic  

The boundaries of the Russian Arctic zone are expanding 

During a meeting of the Russian government on January 18, a decision was made to extend the boundaries of the Arctic zone to include two regions of Ugra – Berezovsky and Beloyarsky districts. The bill states that adopting this document will create favorable conditions for the growth and development of municipal areas within the Autonomous Okrug and the Arctic zone as a whole. The industrial potential of Ugra was discussed during the deliberation of the draft federal law. Expanding the Arctic boundaries will facilitate the establishment of new industries and enhance transportation accessibility for geological exploration and the discovery of deposits of natural resources. 

Bellona comment: The Russian Federation’s Arctic zone operates as a special economic zone, offering significant federal and regional benefits for businesses. These benefits include reduced taxation on mineral extraction, excluding hydrocarbons, for new deposits, and inspections of zone residents only with the consent of the Ministry of Eastern Development. Additionally, non-residents also enjoy reduced mineral extraction taxes. Therefore, extending the boundaries of the Arctic zone with preferential conditions for miners inevitably increases environmental risks on a wider territory. 

From January 1, 2024, the customs duty on the export of oil and petroleum products in Russia has been set to zero, and the duty on the export of natural gas has seen a significant decrease.  

Starting from January 1, there will be no export duty applied to crude oil, light and dark petroleum products, oils, commercial gasoline, and coke. The duty on liquefied natural gas is reduced from $4.7 to $1.6, and on pure fractions of LPG, it is reduced from $4.2 to $1.4. Since 2019, the export duty has been annually reduced by 1/6, while simultaneously increasing the mineral extraction tax. 

The Cape Kammenoy shipping and receiving site of the Novoportovskoye oil and gas condensate field. Credit: Vadimirushka / ru.wikipedia.org

Bellona comment: Approximately 13% of Russian oil and 87% of gas are produced in the Arctic zone. The elimination of export duties on oil and the significant reduction in gas export duties clearly incentivize producers to prioritize the foreign market at the expense of the domestic market, as this measure reduces costs for exporting raw materials. As hydrocarbon exports to Europe gradually decline due to some European countries’ refusal to purchase them from Russia in response to Russia’s full-scale military invasion of Ukraine, new exports are planned to be directed towards Asian countries. This will contribute to a more intensive use of the Northern Sea Route in the eastern direction, increasing the environmental risks associated with shipping and oil&gas transportation. 

The confirmation of the largest gold reserves since the Soviet era in Chukotka 

The State Commission for Reserves of the Federal Agency for Subsoil Use has confirmed the presence of significant gold reserves at Rosatom’s Sovinoye deposit, located on the shores of the Chukchi Sea. These reserves amount to over 100 tons and include more than 30 placer gold deposits and three ore fields. Drilling operations have been carried out throughout the year, despite continuous permafrost conditions. In just three years, a total of 123 wells, spanning over 32 kilometers, have been drilled. The construction of a landing strip, roads, a sea pier, and the gold ore mining and processing complex itself is planned to be completed by 2028. The company aims to achieve its design capacity of producing 3 tons of gold per year as early as 2029. 

Bellona comment: Gold mining in Russia is an industry that poses serious environmental concerns. In 2021, WWF conducted satellite monitoring and identified over 4,300 kilometers of polluted rivers resulting from alluvial gold mining in Siberia and the Far East. Rosprirodnadzor, the federal environmental oversight agency, consistently reports excessive levels of pollutants in water bodies near gold mining sites. In the Arctic, where simplified inspection procedures have been implemented for enterprises, limited official information is available (no data on gold mining in Russia has been published since 2022), making it practically impossible for independent environmental organizations and activists to monitor activities. These circumstances raise concerns about heightened pollution risks at new deposits. 

The authorized capital of Polar Lithium has increased by 2.6 thousand times 

Norilsk Nickel and Rosatom have recapitalized Polar Lithium company to the sum of 2.6 billion rubles. This significant increase may be attributed to the project’s transition into the active phase of the development of the Kolmozerskoe lithium deposit. Currently, lithium, a crucial element for batteries, including those used in electric vehicles, is not mined in Russia. 

The previous year witnessed a record-breaking period for oil drilling 

According to the international news portal Bloomberg, there was an “oil well boom” in Russia in 2023. By the end of the year, approximately 9,000 new wells, with a combined length exceeding 30,000 km, were drilled in the country. The surge in drilling activities can be attributed, among other factors, to the development of new oil sites, notably the implementation of Rosneft’s Vostok Oil project

Rosneft has discovered an underground reservoir in Yamal that potentially suits for storing carbon dioxide 

Experts from the Tyumen Scientific Institute of Rosneft have reported that during a geological survey of the subsoil in the Yamalo-Nenets Autonomous Region, they have identified an underground reservoir potentially suitable for pumping and storing over 300 million tons of carbon dioxide (CO2). The site is situated in a zone of low seismotectonic activity, which could ensure the tightness of the reservoir and safeguard the overlying horizons of ground and surface water from the intrusion of carbon dioxide for 1000 years. 

Bellona comment: In Russia, for several years now, the issue of how to reduce greenhouse gas emissions without forsaking the production and use of hydrocarbons has been actively explored. Thus, Rosneft plans to employ technology for capturing and storing CO2 in underground reservoirs at its Arctic oil fields. Therefore, Russia does not intend to systematically address the root cause of anthropogenic impact on the climate by decreasing the use of hydrocarbon fuels in favour of carbon-free alternatives. Instead, it prefers, contrary to the recommendations of the International Energy Agency, to develop new oil and gas fields in the Arctic, and greenwashing the oil and gas industry. This utilization of otherwise beneficial technology does not align with the goals of achieving climate neutrality. 

3. Sanctions affecting Russian industry in the Arctic regions and the international situation in the Arctic 

Sanctions have been imposed on the import of Russian diamonds 

On January 1, 2024, the 12th package of sanctions came into effect, targeting the import of Russian diamonds into the G7 countries and imposing restrictions on the supply of diamonds to the European Union. From January 1, restrictions on the import of diamonds mined or processed in Russia were enforced, and from March 1, sanctions will apply to Russian diamonds processed in other countries. 

Bellona comment: Russia holds the first place globally in terms of both volume and value of mined diamonds. In 2022, Russia produced more than a third of the entire world market’s 40 million carats of diamonds. Diamonds in the Arctic are primarily concentrated in Yakutia and Arkhangelsk, with Yakutia accounting for 82% of all diamonds mined in Russia. According to Comtrade data from 2022, the European Union imported approximately $1.5 billion worth of diamonds from Russia, constituting 40% of all Russian diamond exports. Hence, the sanctions imposed by the EU could significantly impact the income of the Russian diamond industry, particularly affecting the revenue of Alrosa company, which produces 90% of diamonds in Russia. 

The Verkhne-Munskoye diamond deposit, owned by Alrosa, Oleneksky district, Yakutia. Credir: Alrosa

Finland plans to stop buying Russian gas by 2025 

Finland will initiate legislative measures to prohibit the import of Russian liquefied natural gas (LNG) this year, with the ban scheduled to take effect from the beginning of 2025. This was reported by the newspaper Helsingin Sanomat, citing Finnish Minister of Environment and Climate, Kai Mykkänen, who oversees the LNG sector. Unlike pipeline gas supplies, which cost Finland hundreds of millions of euros per month, and which were terminated in May 2022, the imports of LNG are negligible, amounting to several million euros per month, clarified the newspaper.  

In September 2023, Novatek’s CEO Leonid Mikhelson informed reporters that the Russian company had resumed the supply of liquefied natural gas from the Cryogas-Vysotsk facilities to the Finnish Gasum under contract volumes. Gasum received approximately 40% of the company’s LNG volume, he specified. The Cryogas-Vysotsk plant has a capacity of 770 thousand tons of LNG per year, with gas sourced from Novatek’s Arctic fields. 

Bellona comment: Finland’s sanctions on Russian LNG are unlikely to significantly impact the plans and revenue of the Russian gas industry due to the minimal volume of imports. However, they may set a precedent for other EU countries, hastening the process of phasing out Russian gas. 

Norilsk Nickel reduces production volumes due to negative geopolitical situation 

On January 29, 2024, Norilsk Nickel announced its production results for the past year. In 2023, Norilsk Nickel decreased the production of all metals except platinum by 2-5%, which, according to the company, is attributed to the replacement of mining equipment. For 2024, the forecast indicators for the extraction and production of metals are projected to be below the level of 2023. The Company explains this as a result of persistent risks associated with an unfavorable geopolitical environment, which will adversely affect operational activities. 

Norilsk Nickel also announced that in 2023 it inaugurated a Sulfur Program at the Nadezhda Metallurgical Plant (a new sulfuric acid production plant), aimed at reducing sulfur dioxide emissions into the atmosphere from nickel and copper production facility. However, quantitative results on emissions for last year have not yet been published. 

Kola Nuclear Power Plant reduced plans for hydrogen production from 200 to 150 tons per year 

The press service of the Kola Nuclear Power Plant has announced that the station intends to produce up to 150 tons of pure hydrogen per year at its future bench testing complex. Initially, the capacity of the complex was planned to be 200 tons per year. The director of KNPP remarked that hydrogen projects were originally aimed at export, but now exports are suspended, leaving hydrogen projects in a state of “considerable uncertainty.” 

Japan enhances cooperation with Nordic countries to counter Russian and Chinese influence in the Arctic 

During the visit of Japanese Foreign Minister Yoko Kamikawa to Finland, the Japanese government unveiled a diplomatic initiative to strengthen collaboration with the five Nordic nations. This initiative will encompass four key areas: Arctic Ocean matters, gender equality, green and digital science and technology, and security and defense cooperation. 

Regarding the Arctic Ocean, the government intends for Japan and the five countries to reaffirm the significance of the principles of free and open seas, based on the rule of law, which Japan holds in high regard. The aim of this initiative is to counter the active presence of China and Russia in the Arctic Ocean, as well as other regions of the world. 

4. Northern Sea Route and shipping 

Russia Leads the Top 10 Countries with the Highest Number of Ships in the Arctic Region 

The Arctic Council for the Protection of the Arctic Marine Environment has released a report analyzing the entry of ships into the Arctic under different flags. In 2022, Russia emerged as the country with the highest number of ships in the Arctic region, with a total of 885 vessels. Norway secured the second position with 180 ships. 

The report emphasizes the importance of knowing the country under whose flag a ship sails, as this determines the legal responsibilities for ensuring ship safety, security, and environmental compliance. It also highlights the need to develop strategies to address and prevent hazardous ice conditions and temperature-related challenges. 

The cargo ship “Bering” and the icebreaker “Captain Chadayev”. Arkhangelsk, April 2023. Credit: Yakovlev Sergey / Shutterstock.com

Freight traffic along the NSR in 2023 was 36.3 million tons, which is 10 million tons lower than planned 

On January 10, 2024, the Department of Communications of the State Corporation Rosatom announced that cargo traffic along the Northern Sea Route in 2023 reached a record figure of 36,254,000 tons. This milestone represents the highest amount in the history of the Northern Sea Route’s development, although it fell short of the target of 46 million tons. More than half of the cargo flow was attributed to LNG transportation from the Novatek Yamal LNG plant, while the remaining cargo primarily came from Gazprom Neft, Lukoil, and Norilsk Nickel, who redirected their shipments from the western to the eastern direction. 

5. Accidents and emergencies in the Russian Arctic 

In January, two local incidents occurred: a groundwater breakthrough at the Zapolyarnaya coal mine near Vorkuta, resulting in one fatality, and an explosion of the main engine turbine on a fishing vessel in the Barents Sea.