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Russian industry against turnover fines for exceeding emission quotas

22 july 2022
According to kommersant.ru , large industrial enterprises strongly opposed the initiative of the Ministry of Natural Resources to introduce turnover fines for exceeding quotas of emissions of harmful substances into the atmosphere.
Now the authorities are conducting an experiment on emission quotas in 12 cities. According to business estimates, the amount of such fines may exceed 300 billion rubles a year, which will negatively affect companies and may even force them to cease operations.
Interlocutors of kommersant.ru in companies fear that the scale of fines may radically go up after the number of cities participating in the experiment has been increased to 41.
According to the draft, which is due to come into force from September 2023, for legal entities, the amount of an administrative fine can range from 5% to 10% of revenue.
The experiment on quotas of harmful emissions until July included 12 of the most unfavorable cities in terms of air quality: Bratsk, Krasnoyarsk, Lipetsk, Magnitogorsk, Mednogorsk, Nizhny Tagil, Novokuznetsk, Norilsk, Omsk, Cherepovets, Chelyabinsk and Chita. During the experiment, which should last until 2027, enterprises are required to reduce emissions in accordance with the quotas issued to them. By 2024, this mechanism should ensure a 20% reduction in air pollution in these cities, "which will improve the quality of life of more than 6.4 million people." 
In the spring of 2021, Russian President Vladimir Putin proposed to extend the quota system to all cities of the country where there are problems with air quality. In this regard, in July 2022, the list of cities was expanded to 41.
According to the position of the Russian Union of Industrialists
and Entrepreneurs (RSPP), the turnover penalty is "absurd and for the vast majority of enterprises is equivalent to raising the question of the expediency of conducting economic activity as such, since it can many times exceed the size of their net profit." In addition, according to business, the very concept of turover fines is not sufficiently justified.
Instead, it is proposed to set them in direct monetary terms, and also take into account the possibility of compensatory measures if quotas are not reached.
"For a number of operations that are participants in the experiment on emission quotas, in particular, NLMK, Norilsk Nickel, Severstal, Evraz, Rusal, the amount of annual revenue is estimated in hundreds of billions of rubles, that is, the bill refers to the possibility of simultaneous withdrawal of tens of billions of rubles from them, which is comparable with the annual volume of investments of such companies," the feed-back note of the RSPP says.
For example, for Norilsk Nickel, the size of fine is estimated at 47-95 billion rubles per year, NLMK - 29-59 billion rubles, Severstal - 31-61 billion rubles, Rusal - 9-18 billion rubles, Evraz - 25-50 billion rubles. Gazprom Neft, which owns the Omsk Refinery, may suffer from the oil industry - fines for it may amount to 2-5 billion rubles. According to business, fines can lead to a decrease in investments in the environment.

Alex Shishlo for Rough&Polished