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Circular Economy: The Russian Model and Foreign Experience
25 May 2018
12:00—13:15
KEY CONCLUSIONS
Russian manufacturing to be BAT by 2021

This year, 300 largest Russian enterprises (oil, gas and metallurgy) are switching to the Best Available Technologies (BAT). And by 2021, all Russian enterprises will have to make this transit — Sergei Ivanov, Special Presidential Representative for Environmental Protection, Ecology and Transport.

Russia sets priorities for waste management

We have a pyramid of priorities regarding what to do with waste. Reduced consumption of raw materials takes the first place. The second place goes to reduced waste generation. Number three is recycling, and in some place we’ll may be able to create secondary resource involved in the turnover. Then it’s incineration as a type of disposal. The measure of last resort is a landfill — Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade of the Russian Federation.

Circular economy at the outset

Creating a circular economy model doesn’t only mean creating industries that collect, sort and transport garbage. It’s a change in the mentality — Sergey Komyshan, Member of the Management Board and Executive Director of SIBUR LLC..

The title of our session mentions the Russian model. But we need to talk about the future Russian model, because Russia is only starting the path towards a circular economy — Frank Schauff, Chief Executive Officer, Association of European Businesses.

Separate waste collection is a complex process, it can not be carried out within one or two years. Scandinavian countries took over ten years to train their population and create a processing system — Sergei Ivanov, Special Presidential Representative for Environmental Protection, Ecology and Transport.

ISSUES
Circular economy: not just waste issue

All large industrial enterprises consume a lot of water. The question is what they discard — Sergei Ivanov, Special Presidential Representative for Environmental Protection, Ecology and Transport.

Untargeted waste management funds

At the beginning of the decade, responsibility of car makers for recycling old cars was under discussion. As a result, a recycling fee was introduced. But it is not used to develop the waste management industry — Frank Schauff, Chief Executive Officer, Association of European Businesses.

Building circular economy requires two components: political will and financial resources. There is such a thing as extended producer responsibility. In Europe, for a number of items the fee can be up to 100%, in Russia it’s 7–10%. We subsidize those who import goods to Russia, and do not encourage them to recycle the waste — Vladimir Gutenev, First Deputy Chairman of the State Duma Committee on Economic Policy, Innovative Development, and Entrepreneurship.

Scale key to recycling business attractiveness

It takes high cost to be successful in recycling because there is not enough scale. If it ever gets to a large scale, it won’t be costly anymore, and can possibly become profitable. The key question is how to create the scale when all the volumes that we collect are recycled at the highest benefit possible — Stefanos Vafeidis, General Manager, Coca-Cola HBC Russia.

SOLUTIONS
Transit to Zero Liquid Discharge System

Industrial enterprises will switch to the following technology: once they take water from an external source, they will not take it anymore. It will circulate inside, they will do the treatment and consume it right there — Sergei Ivanov, Special Presidential Representative for Environmental Protection, Ecology and Transport.

Financial incentive for new technologies

Enterprises that introduce the BAT get tax incentives, lower fees for negative impact, and subsidized loan rates have been subsidized — Murad Kerimov, Deputy Minister of Natural Resources and Environment of the Russian Federation.

Separate waste collection system to be created

Plastic leaves the biggest carbon footprint compared to other materials. But in terms of energy consumption in production, plastic needs eight times less energy in comparison with aluminium cans. One ton of plastic takes 40 times less CO2 emissions to produce than aluminium. Plastic is used for thermal regulation and insulation, which allows us, as consumers, to spend less energy. Plastic materials are lighter, that’s why it is used in the transport industry helping to save fuel. Plastic helps keep food and reduce the amount of debris. Packaging helps extend life for meat by 5–7 days. Almost 100% plastic can be recycle. The difficult part is separate waste collection — Sergey Komyshan, Member of the Management Board and Executive Director of SIBUR LLC..

In a closed cycle everything depends on how we collect waste. Russia doesn’t have appropriate infrastructure. There are people, who want to do waste collection, but this requires incentives. There should be a general legislative framework for regulation. In 2016, we launched a project called Sorting Together. It aimed to educate and train consumers. We need to create a new mentality for separate waste collection — Stefanos Vafeidis, General Manager, Coca-Cola HBC Russia.

Recycling technologies development

For us, the question of how to collect and handle waste is goes beyond producing recyclable materials. For us, it is biogas. We have a lot of boilers that work on biogas — Arto Räty, Senior Vice President, Corporate Affairs and Communications, Fortum Corporation..

Duracell's experience is batteries collection. We started with the most important thing – retail. We install boxes for batteries disposal in retail outlets. This year, our target is at least 500 boxes. This will give us about 1 thousand tons of batteries, which is 5% of what the country consumes. Batteries go to the only plant in Russia that recycles them — Yuri Korotaev, General Director of Duracell Russia.

Involving society, business and scientists in problem solving

First of all, (green economy – Editor’s note) it’s the sustainable development of society. But in order to ensure more sustainable development, we need to involve representatives of the society in the problem solving process. Everyone should think about it. <...> We need to involve business in these tasks — Pontus Erntell, General Director, IKEA Russia.

Our company has a programme called Together to zero, which plans to bring CO2 emissions and water effluents down to zero by 2030. But so far we do not know how to do it. For this purpose we have awarded grants to theses that will enable us to get a solution and make a breakthrough in technology — Cees't Hart, President and CEO of Carlsberg Group.

The material was prepared by the Russian news agency TASS