VTB and Uralchem Agree to Cooperate in a Climate Project to Absorb GHG
VTB will advance the development of a new type of forest climate project initiated by Uralchem. The corresponding memorandum of understanding was signed by the Head of Client Coverage, Senior Vice President at VTB Dmitry Snesar and Deputy CEO, Director of Strategy at Uralchem Mikhail Genkin.
Forest projects are one of the key areas of the Russia’s low-carbon development strategy. The scope of the Uralchem project includes renewable timber plantations, processing of felled wood, and wood waste management as a way of long-term storage of fixed carbon. In particular, within the framework of plantation cultivation, it was proposed to implement two strategies: the restoration or introduction of forest shelterbelts in the south of the European part of Russia and the cultivation of existing eucalyptus plantations in the subequatorial climate of Brazil, a BRICS country. The project has the potential to absorb a significant amount of greenhouse gases and provide a long (over 100 years) storage life of fixed carbon.
“Forest climate projects are not only an important environmental goal, but also the basis for achieving Russia’s goals to reduce CO2 emissions. In the light of the adoption of laws on carbon credits and climate projects, we expect a snowballing growth of the afforestation and restoration market, projects to reduce forest fires, and preserve the forest fund. According to VTB Capital’s calculations, by 2050, the absorption capacity of Russian forests may increase to 1.2 billion tons. Last year, VTB approved the ESG strategy and created the ESG platform. Supporting climate projects is one of our priorities. We have a long-term relationship with Uralchem. Within the framework of cooperation on this project, we plan not only to provide consulting support, but also to form financial instruments, including those based on emitted/nominated carbon units,” Dmitry Snesar said.
“The 196 member states of the UN Convention on Climate Change have committed themselves to achieving carbon neutrality under the Paris Agreement. As a compensatory measure, the new forest climate project has no alternatives. An integrated approach to the production of plantation timber, its processing, the substitution of wood materials and products in the mass construction sector, as well as special methods for the long-term and safe conservation of wood waste, can absorb a significant amount of greenhouse gases (globally) and guarantee long-term deposit of fixed carbon,” Mikhail Genkin commented.
“Currently, Uralchem is developing a comprehensive Climate Strategy. We are looking for the best solutions in various areas that will reduce greenhouse gas emissions and help achieve global climate goals. One of the promising areas is forest climate projects of a new type, and we are happy to have the opportunity to develop this unique project together with our partners,” said Angelina Verba, Chief Sustainability and Investor Relations Officer at Uralchem.