The Gaidar Institute’s International Best Practices Analysis Department conducted a study on the state of the Russian carbon credit market, analyzing international experience and the development of this instrument in Russia. The article has been submitted for peer review to an academic journal, and the study’s detailed findings were published in Rossiyskaya Gazeta.
Experts have found that Russia’s voluntary carbon credit market has not yet fulfilled its key function: stimulating actual emissions reductions. Despite the formation of a massive supply pool numbering tens of millions of credits, actual demand and economic activity remain at minimal levels. The study noted that with 36.5 mn carbon credits in circulation and another 101 mn awaiting issuance, the total transaction volume since 2022 amounted to only about Rb2.5 mn, and no more than 165,000 credits were actually used. Experts attribute this to the voluntary nature of the market, where companies participate primarily for the sake of reputation or as part of the Sakhalin experiment, and the price of approximately Rb800 per unit often does not cover the actual costs businesses incur for climate projects.
To address this issue, Gaidar Institute experts propose expanding the Sakhalin experiment to other regions and introducing geographic restrictions on the crediting of carbon units, so that emissions reductions lead to improved air quality in specific industrial zones. Additionally, it is recommended to limit the types of climate projects, thereby incentivizing modernization in the most problematic sectors. A key condition remains the creation of sustainable demand through mandatory requirements for companies; otherwise, carbon credits risk remaining a purely formal reporting tool.