Gazprom is having to work hard to make friends in western Europe, where its growth is suspected of endangering energy security.
To endear itself to European electricity firms, the Russian gas producer is developing plans to allow customers to meet emissions reductions targets when buying fuel.
Gazprom will bundle carbon credits, as certified under the Kyoto Protocol, together with natural gas. It hopes to market the combination as ‘carbon neutral’ energy. Yesterday the company announced it has arranged a six-year deal to buy emissions reductions credits from a biomass project in Brazil. It will sell these credits in Europe.
Gazprom is well-placed to cash in on the carbon market. As a state company it will have preferential access to Russia’s vast store of emissions reductions credits. This will give it the edge over commodity traders, hedge funds and banks hoping to strike it lucky in the carbon trade.
Yet there remains one snag. Russia is yet to pass legislation to implement the Kyoto Protocol domestically. Meanwhile, Gazprom, through its banking subsidiary, Gazprombank, is investing in energy efficiency measures to generate emissions reductions credits. The bear is coming to the carbon market.
John Russell, deputy editor