Businesses turn green – Vedomosti, Saint Petersburg

A number of companies operating in St. Petersburg and the Leningrad region announced plans to switch to renewable energy or increase its share in the total consumed resources.

In February, the Russian representative office of Finnish food manufacturer Fazer announced the conversion of three of its Saint Petersburg-based bakeries to renewable energy generated by hydroelectric power stations. According to the Committee on Industrial Policy, Innovation and Trade of Saint Petersburg, the production sites of Smolenskaya, Neva and Morinskaya switched to VEI, which from the beginning of 2022 began to use electricity generated only at hydroelectric power stations. The company itself did not respond to Vedomosti’s request.

Denis Romanov, technical director of Rockwool in Russia, told Vedomosti that in 2024 the company plans to transfer its plant in Vyborg to the RES plant. “At the end of last year, we announced the establishment of a new line for producing heat and sound insulation materials from stone wool through electro-smelting of raw materials. For this project, we are considering the use of green energy only,” Romanov said. The plant’s existing capacities will also use renewable energy sources. To do this, Rockwool plans to purchase I-REC green certificates, with which it expects to cover 100% of the electricity consumed. The green REC is a document that certifies that the electricity was produced by a clean source registered in a special registry.

Sveza (one of the largest producers of plywood in Russia) has taken a different path: in order to provide itself with renewable energy, it itself is building small solar thermal power plants running on carbon-neutral fuels, such as wood chips and bark, by-products of the main production. The company’s press service informed Vedomosti that it plans to generate up to 20% of its green electricity at its thermal power plants. The press service added: “The construction of a new heating plant in St. Petersburg is now nearing its end, which, in addition to the plant itself, will heat dozens of residential buildings and social facilities in the village of Bunton.”

Despite Western sanctions, many companies in the northwest will remain export-oriented for a long time, and the use of green energy, including renewable energy, for production remains appropriate, according to experts interviewed by Vedomosti. According to Professor of the Department of Economics and Management of Enterprises and Industrial Parks of Saint Petersburg State University of Economics Anush Irapitova, it is very difficult to estimate the share of industrial enterprises in the Leningrad region that have partially or completely converted or are planning to switch to green electricity in the near future, due to the lack of statistics on this subject .

Due to the sanctions imposed, the plans of many companies may be violated. “The main problem in the development of renewable energy in our country is that we do not have our own set of technical and technological solutions for the production of power plants operating on renewable energy sources, and the development of this energy sector depends on other countries,” says Airapetova.

Company representatives say that Russian legislation so far does not provide any benefits for those switching to green energy. Romanov points out that Rockwool is headquartered in Denmark, so the company is committed to ESG’s global agenda of European legislation and low-carbon project development. The press service of Sveza explained that in 2020 the company joined the United Nations Global Compact, an international initiative in which participants conduct business in the interests of nature and society. As for monetization of the ESG strategy, for now, the company is only studying the issue.

“Therefore, companies are faced with a choice – to build their own sustainable development policy, based on the experience of global companies, or wait until laws and regulations appear in Russia,” the press service of Sviza explained.

Yana Klimentovichs, Director of IDPO VESh, Saint Petersburg State University of Economics, says that so far there is no need to talk about direct monetization of the transition to green energy in Russia. But in the future, companies that pay more attention to it will have “advantages in terms of attracting funding and awarding contracts,” she said.

According to experts, now reducing emissions through the development of private renewable energy generation or obtaining green certification increases the cost of production. But according to Romanov, green energy is becoming more affordable, and the cost of production is increasingly dependent on raw materials and logistics, and not on energy costs.

Sveza also believes that green energy costs can be improved. For example, a partial transition of a company to its own green power generation already helps reduce costs, since the electricity generated in the factory is cheaper than the wholesale market. “For example, in Manturov (Kostroma region) its electricity cost is reduced by 21%. In addition, by using by-products as fuel, we avoid the cost of their disposal in landfills, ”commented the press service of the company.

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