News

Monthly Highlights from the Russian Arctic, March 2024

Photo: Shutterstock
Photo: Shutterstock

Опубликовано: 07/05/2024

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 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 this territory, including the exclusive economic zone of the Arctic Ocean. To understand and examine 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.   

Our previous monthly highlights for February can be found here. 

In this issue:

INTERNATIONAL SITUATION IN THE ARCTIC AND SANCTIONS AFFECTING RUSSIAN ACTIVITIES IN THE ARCTIC REGION
1. Russia has announced the potential withdrawal from the UN Convention on the Law of the Sea in the Arctic
2. Japan has tightened its restrictions on diamond imports
3. An Indian company has opted out of importing Russian oil conveyed by Sovcomflot tankers following US sanctions

HEIGHTENED INDUSTRIAL ACTIVITY IN THE ARCTIC
4. Two new territories have been incorporated into the Russian Arctic zone
5. Komi is gearing up for the launch of a new gas project
6. Rosatom is ramping up ore production and processing at the Lovozersky rare earth metal deposit in the Murmansk region
7. Rosatom is currently in negotiations with Chinese companies regarding the development of the Pavlovsk silver-bearing lead-zinc deposit project

NORTHERN SEA ROUTE AND SHIPPING
8. New emission control areas for shipping will soon be established in the Arctic
9. Methanol-fueled ice-class tankers may emerge in Russia by 2029
10. The cargo turnover of Russian seaports in the Arctic witnessed a 4.5% decline in January-February 2024 compared to the preceding year

ACCIDENTS, EMERGENCIES, AND VIOLATIONS OF ENVIRONMENTAL LEGISLATION IN THE RUSSIAN ARCTIC
11. Norilsk experienced severe air pollution due to sulfur dioxide emissions

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

Russia has announced the potential withdrawal from the UN Convention on the Law of the Sea in the Arctic ↑

Nikolai Kharitonov, Chairman of the State Duma Committee for the Development of the Far East and the Arctic, conveyed in an interview with the Russian publication Izvestia that Russia considers withdrawal from the UN Convention on the Law of the Sea in the Arctic “in order to protect national interests”. The UN Convention serves as a pivotal international document delineating the rights and obligations of states in the global oceans, encompassing territorial limits, resource exploitation, and fishing rights. 

Thure Henriksen, a professor at the Faculty of Law at the Arctic University of Norway, observes that should Russia withdraw from the convention, it is likely to uphold its fundamental principles, as they align with international norms entrenched in other agreements. Nevertheless, departing from the UN Convention would enable Russia to revert to a sectoral approach in delineating maritime boundaries in the Arctic, a method employed prior to the convention’s ratification in 1997. Under this scheme, Russia would assess its entire territory along a meridian line extending from the mainland to the North Pole. 

Presently, there exists an alternative approach to establishing national boundaries in the world’s oceans. This approach, as outlined in the UN Convention, designates exclusive economic zones and continental shelves wherein coastal nations exercise sovereign rights, while others enjoy freedoms associated with the high seas, such as the freedom of navigation. 

Bellona’s comment: 

«The remarks made by a State Duma deputy regarding Russia’s potential withdrawal from the UN Convention on the Law of the Sea appear to be yet another political gesture intentionally setting Russia against established international law. Such a move is unlikely to yield significant practical repercussions if Russia intends to maintain trade relations with other nations and avoid complete isolation»

Japan has tightened its restrictions on diamond imports ↑

New Japan sanctions, which took effect on March 31, have been implemented to enhance scrutiny over the import of Russian diamonds. These measures prohibit the import of non-industrial diamonds from third countries. Since March, indirect imports of Russian diamonds into G7 nations have been banned. 

One of the developed quarries of the Alrosa company in Yakutia. Photo: zebra0209 / Shutterstock.com

Plans are underway to launch a system for tracking the origin of precious stones in September, with testing commencing since March. Each diamond is expected to possess its own electronic certificate, ensuring its provenance, which will be stored in a centralized database. 

The ban on Russian diamond imports was initially imposed by the European Union and G7 countries in December 2023. 

Bellona’s comment:  

«The effectiveness of sanctions targeting Russian diamonds will only become apparent by mid-to-late 2024. However, based on the outcomes of 2023, it is evident that despite the rise in revenue from diamond sales, Alrosa, the primary diamond producer in Russia controlling over 90% of production, encountered increased costs, resulting in a 15% decrease in net profit compared to 2022.

Diamond production of Allrosa also experienced a decline in 2023, dropping by 2.8% from 2022 levels. Nonetheless, one of the primary purchasers of Russian diamonds, India, saw a 28% surge in acquisitions in January 2024 compared to the corresponding period of the previous year.

It is probable that India is aiming to amass stocks of Russian rough diamonds before the implementation of the stone origin tracking system, which would subsequently prohibit the sale of diamonds derived from Russian sources on the global market. If Russia fails to circumvent the new diamond origin tracking system, a reduction in diamond exports appears inevitable.

At present, all Russian diamonds are extracted in the Arctic region»

An Indian company has opted out of importing Russian oil conveyed by Sovcomflot tankers following US sanctions ↑

As reported by Reuters, Reliance Industries, an Indian company operating the world’s largest oil refining complex, decided to discontinue purchasing Russian oil transported by Sovcomflot vessels subsequent to the imposing of US sanctions against the Russian shipping firm in February of this year. 

Another Indian oil refiners also intend to cease utilizing Sovcomflot vessels in the near future. This action could potentially diminish the volume of Russian oil imports into India and limit Russia’s access to markets. 

Bellona’s Comment:  

«This serves as another illustration of how the prospect of secondary sanctions from the United States can effectively sway the decisions of third-party nations regarding the import of goods from Russia. Following a decline in Russian oil sales on the European market in 2022, India emerged as one of the largest purchasers of Russian oil, subsequently reselling petroleum products manufactured from it to Europe.

Now, such circumvention of sanctions may likely diminish, resulting in fewer parties willing to engage in the purchase of Russian oil. Conversely, this could lead to the substitution of Sovcomflot tankers with vessels owned by obscure foreign entities with inadequate insurance coverage, thereby escalating the risks of accidents and oil spills during transportation»

Heightened industrial activity in the Arctic

Two new territories have been incorporated into the Russian Arctic zone ↑

Two new municipalities were added to the Arctic zone of the Russian Federation – Berezovsky and Beloyarsky, situated in the Khanty-Mansiysk Autonomous Okrug (Ugra). A corresponding decree was signed by the president on March 25. 

Natalya Komarova, Governor of Ugra, emphasized that the new status of these territories will facilitate investment attraction to the region. She highlighted the potential of the Berezovsky and Beloyarsky districts across various sectors, including mineral extraction, timber processing, energy, consumer goods manufacturing, food production, construction materials, and tourism. 

Bellona’s Comment:  

«In our January digest, we highlighted that the industrial development in the expanding Russian Arctic zone poses heightened environmental risks. This is attributable to the incentives and special conditions granted to businesses in this zone to stimulate industrial growth, including relaxed environmental control measures.

The aforementioned areas in Ugra, constituting roughly 2.5% of the land portion of the Russian Arctic, are hubs of vigorous industrial activity. The Berezovskoye oil and gas field, operated by Gazprom, is currently situated in the Berezovsky district, with Surgutneftegaz and LUKOIL operating in the Beloyarsky district.

Moreover, these regions boast substantial reserves of metallic ores and other solid minerals. In February, the rights to develop the Telaiz and Tynagot gold deposits in the Berezovsky district were put up for auction. The sole bidder, Moscow-based Azot Trading LLC, secured the auction in March»

Komi is gearing up for the launch of a new gas project ↑

Vladimir Uiba, the head of the Komi Republic, announced on March 14th that Timan-Pechora Gas Company LLC intends to reactivate five gas wells and drill a new one in the circumpolar city of Inta. The company is also in the process of designing a gas pipeline. By the end of 2024, TPGC plans to invest approximately 1 billion rubles (aprx EUR 10 mln) into the costly drilling and well reopening procedures. 

TPGC was established in 2006 and holds 13 blocks of the Timan-Pechora hydrocarbon fields, with initial plans to produce and process gas into methanol. However, the development of the deposits progressed slowly. Since 2021, the company has been up for sale, but it only found a buyer in mid-2023, at a price three times lower than the original one. 

The new owners aim to achieve a gas production of 500 million m3 by 2025 and 2 billion m3 by 2027. By 2029, they plan to construct a gas chemical complex utilizing Russian technologies. Additionally, the investor intends to establish a natural gas liquefaction plant with a capacity of 1.5 tons per hour. The investors are expecting government support from the Ministry of Development of the Far East and Arctic. 

Bellona comment:

«The exploration and production of hydrocarbons in the Arctic pose significant environmental risks. The creation of necessary infrastructure, such as drilling sites, production facilities, and roads, has a considerable impact on the surrounding environment, including intact ecosystems.

The exploitation of gas fields results in methane emissions, a potent but short-lived greenhouse gas. According to Roshydromet (the Federal service for hydrometeorology and environmental monitoring), methane emissions from gas production in Russia totaled 1.8 million tons in 2020. Introducing a ban on the development of new oil and gas fields in the Arctic could serve as a crucial measure in preserving its vulnerable natural environment and preventing adverse consequences for the climate and ecosystems»

Rosatom is ramping up ore production and processing at the Lovozersky rare earth metal deposit in the Murmansk region ↑

The mining division of the Rosatom State Corporation has unveiled plans to develop a technology for extracting rare earth metals in the Lovozero tundra massif. According to Alexey Shemetov, a representative of the Rosatom Mining Division, the primary objective is to ensure the complete raw material independence of Russia’s high-tech industries from imported rare earth metals. 

Previously, loparite ore, enriched at the Lovozero Mining and Processing Plant, was dispatched to a facility in Solikamsk, where niobium, tantalum, and titanium were separated from it, leaving other rare earth metals in the total concentrate. The new technology will enable the separation of this concentrate into cerium, lanthanum, neodymium, praseodymium, and a medium-heavy rare earth element concentrate, crucial for magnet production, petrochemical catalysts, and other high-tech applications.

The Lovozersky rare earth metal deposit. Credit: strana-rosatom.ru

To boost loparite ore production, the design of underground mine workings at the Karnasurt mine has commenced, alongside plans to exploit new deposits on Mount Alluive in the Lovozero district of the Murmansk region. The development of Mount Alluive deposits could yield up to 20 thousand tons of loparite concentrate annually for 80 years. Presently, the enterprise produces approximately 7.5 thousand tons of concentrate per year. 

Bellona Comment:

«The expansion of the Lovozerskoye deposit aligns with Rosatom’s strategy to enhance the mining and production of rare earth metals for use in nuclear and other high-tech industries. Currently, the rare earth metal mining and production sector in Russia is underdeveloped, accounting for less than 1% of global production. Ambitious plans for field development entail an increase in waste (tailings) generation, land degradation from mining activities and waste storage. According to Rosprirodnadzor (the Federal service for supervision of natural resources), the Lovozersky Mining and Processing Plant generates 17.8 million tons of waste annually, which is disposed on the nearby site»

Rosatom is currently in negotiations with Chinese companies regarding the development of the Pavlovsk silver-bearing lead-zinc deposit project ↑

During the international forum Atomexpo-2024 on March 25th, First Mining Company, a subsidiary of Rosatom that holds ownership of the Pavlovsk deposit, signed memorandums for the implementation of the Pavlovsk deposit project with Chinese firms NFC and Pauerite. These companies are slated to design a process plant for the lead-zinc ore and explore new markets for metals in Asia. 

Bellona Comment:

«The Pavlovsk lead-zinc deposit ranks among the world’s largest, boasting estimated resources of 19 million tons (1967 thousand tons of zinc, 453 thousand tons of lead, 672 tons of silver). Rosatom initially planned to commence production there in 2021, but the project’s execution was delayed, partly due to a lack of internal investments and technologies.

In 2020, an agreement was struck with the Finnish company Metso Outotec to design a floating concentrator for the field. However, following the Russian invasion of Ukraine in 2022, the Finnish company withdrew from the collaboration. Rosatom has now secured new partners to undertake the enterprise’s design from scratch, although the feasibility of this new plan remains uncertain.

Following the onset of the Russian invasion of Ukraine, exports of lead and zinc from Russia experienced a sharp decline. Switzerland, the largest importer of lead, had already ceased Russian supplies prior to the imposition of sanctions. By June 2022, Russian lead smelters were compelled to halt production due to international sanctions. In addition, the Russian Ministry of Industry and Trade’s implemented an export licensing system for each export sale, further impeding exports. In December 2023, the UK also enforced a ban on the import of Russian metals, including zinc and lead.

The success of developing this deposit hinges entirely on the commitment of the Chinese partners and Rosatom’s ability to secure new markets in Asia amid the backdrop of prevailing international sanctions, while other nations stand ready to increase their own mining and production of these metals.

Moreover, in Russia itself, there are competitors—the Ozernoye deposit of zinc-lead ores in the Republic of Buryatia is poised for launch, originally slated to commence operations in 2023, yet thwarted by sanctions»

Northern Sea Route and shipping

New emission control areas for shipping will soon be established in the Arctic ↑

From March 18th to 22nd, the 81st session of the International Maritime Organization (IMO) convened, endorsing a proposal to establish new emission control areas for shipping in Arctic waters, specifically in Canada and Norway. 

The objective behind this initiative is to mitigate emissions of sulfur and nitrogen oxides, as well as particulate matter like soot and smoke, which emanate from shipping activities. These measures are anticipated to enhance air quality and diminish black carbon pollution, a factor exacerbating climate change in the Arctic. 

Planned shipping emission control areas in Arctic waters of Canada and Norway. Photo: cleanarctic.org

Similar measures have already been implemented in the Baltic and North Seas, as well as along the west and east coasts of the United States, excluding Alaska. Efforts to establish regulated zones are also underway in the northeast Atlantic Ocean, spanning from Portugal to the UK and Iceland. 

The finalization of the new emission control zones is scheduled for IMO 82nd session in October, with enforcement date not earlier than March 1, 2026. 

Bellona Comment:

«The enforcement of new international regulations will impact Russian shipowners whose vessels traverse through emission control areas. It is projected that in Norway this area will encompass an exclusive economic zone extending up to 200 nautical miles or 370.4 kilometers from the coast, encompassing major shipping routes in the country’s northern waters. Norwegian waters south of the 62nd parallel north are already encompassed within the Emission Control Area.

Russian shipowners will be compelled to adhere to prescribed restrictions: either switch to environmentally cleaner yet costlier fuels or install scrubbers—emission treatment systems (although Bellona argues that scrubber usage is not the optimal solution, as while it reduces harmful emissions into the atmosphere during fuel combustion, it elevates pollution of seawater, where all filtered waste is ultimately discharged) to meet sulfur emission limits. The new policy will reduce the sulfur content of fuel burned in ship engines from the current level of 0.5% to 0.1%.

Despite Norway’s prohibition of Russian ships from entering its ports from May 2022, exceptions were made for fishing vessels and ships transporting essential commodities such as medicine, food, and energy resources»

Methanol-fueled ice-class tankers may emerge in Russia by 2029 ↑

The Ruskhim group, currently constructing a large gas chemical complex in the Arctic, has devised a vessel design tailored for exporting methanol while utilizing the transported methanol as fuel. Three ice-class vessels have been commissioned from foreign shipyards, set to be delivered in 2029, coinciding with Ruskhim’s plan to inaugurate the gas chemical complex in the Nenets Autonomous Okrug. 

These vessels are slated to traverse between the Nenets Autonomous Okrug and Murmansk, facilitating the export of methanol to Russia-friendly nations, primarily via the Suez Canal, with partial routes traversing the Northern Sea Route. 

Bellona Comment:

«Methanol stands as a promising alternative fuel for ships. Despite its high flammability and toxicity to humans, its environmental impact remains constrained. It poses minimal harm to aquatic organisms like fish, algae, and microorganisms, and rapidly decomposes in seawater. A panel of marine conservation experts asserts that a methanol spill is highly unlikely to pose an acute threat to marine life.

However, the environmental impact of methanol varies depending on its production method. “Green” methanol, derived from renewable sources, is hailed as a marine industry alternative fuel capable of significantly reducing greenhouse gas emissions—up to 95% compared to traditional fuels.

In contrast, the Ruskhim project revolves around “gray” methanol, extracted from natural gas. While direct emissions from “gray” methanol combustion are 7% lower than those of diesel fuel, considering the entire production cycle—from extraction to combustion—results in higher carbon dioxide equivalent emissions than diesel. Thus, from a greenhouse gas emissions perspective, the Ruskhim project falls short of being environmentally sound.

Furthermore, uncertainties loom over the project’s future, slated for launch post-2029. A Ruskhim representative noted China as the primary market for exported methanol from the project. Nevertheless, analyst projections suggest a decline in methanol demand in China post-2030s, potentially dropping below current levels by 2050»

The cargo turnover of Russian seaports in the Arctic witnessed a 4.5% decline in January-February 2024 compared to the preceding year ↑

According to the Federal Agency for the Aea and Inland Water Transport, the aggregate cargo turnover of Russian seaports experienced a marginal 1% decrease, with the most notable decline occurring within the Arctic basin, amounting to 15 million tons (-4.5%). This encompasses a reduction in dry cargo transshipment to 4.2 million tons (-8.3%) and liquid cargo to 10.8 million tons (-3%). In total, the cargo turnover of Russian Arctic ports in 2023 reached 97.9 million tons, marking a 0.7% decrease from 2022. 

Bellona Comment:

«In light of aspirations to increase cargo traffic along the Northern Sea Route from 36.6 million tons in 2023 to 72 million tons in 2024 (with this target revised downward from 80 million tons in December 2023), the decline in cargo turnover at Arctic ports likely indicates a reduction in domestic maritime transport. »

Accidents, emergencies, and violations of environmental legislation in the Russian Arctic

Norilsk experienced severe air pollution due to sulfur dioxide emissions ↑

On March 6th, Norilsk recorded significant air pollution with sulfur dioxide, exceeding the maximum permissible concentration (MPC) by 4.26 times according to official sources, and 7 times as reported by local environmental activists. These activists also criticized the lack of action from responsible authorities, notably the prosecutor’s office, concerning the alleged emission source—the polar branch of Norilsk Nickel—which purportedly ignores citizens’ appeals. A month earlier, on February 8th, sulfur dioxide levels surpassed the maximum permissible concentration by tenfold. 

At the same time, long-time announced Norilsk Nickel’s Sulfur Program aimed to reduce emissions of sulfur dioxide by 20% in Norilsk already by 2024. Furthermore, in March 2024, Norilsk Nickel updated its environmental and climate change strategy from 2021, reaffirming its commitment to curtail sulfur dioxide emissions by 90% by 2031. This strategic shift was prompted by geopolitical changes, stricter environmental regulations, and international standards, as per the company’s press service. 

Norilsk. Photo: Shutterstock

The new strategy comprises mandatory and voluntary components. Mandatory aspects encompass compliance with legal requirements concerning emergency situations, air and water quality, waste and tailings management, and soil and biodiversity conservation. The flagship project remains the Sulfur Program in Norilsk, aimed at curbing sulfur dioxide emissions into the atmosphere, along with a similar initiative in Monchegorsk, Murmansk region. 

The voluntary segment of the strategy focuses on waste management, participation in international initiatives and standards, and climate action. 

Bellona Comment:

«The overwhelming majority of atmospheric emissions in Norilsk (approximately 97-98%, according to official company reports and Rosprironadzor data) stem from sulfur dioxide generated by the Polar Branch of Norilsk Nickel. Hence, there’s little doubt regarding the emission source on March 6th and February 8th. Despite the launch of Norilsk Nickel’s Sulfur Program for sulfur dioxide capture and utilization in October 2023, its efficacy is now under scrutiny.

In addition to curbing air emissions, strategic objectives prioritize ensuring compliance of the Polar Branch with legal environmental standards. This underscores systematic non-compliance of enterprise operations with established standards. For instance, in 2022, 44% of wastewater failed to meet pollution concentration standards, and 5% of waste was improperly disposed.

Consequently, Norilsk Nickel remains one of the “dirtiest” enterprises not only in the Russian Arctic but also across the entire Arctic region. Norilsk has consistently ranked among the top 10 cities in Russia with the most polluted air for years»