“The petrochemical industry should focus more on environmentally friendly products and clean energy solutions”

Interview with Elena Myakotnikova, Head of SIBUR's Climate Initiatives and Carbon Regulation.

Given the current tough economic and geopolitical environment, what is your take on the future of the Chinese-Russian partnership in the petrochemical sector? What new challenges await the industry during the global transition to renewable energy sources? How will China and Russia join efforts in adapting to these changes? The Economic Observer sought answers to these questions in an interview with Elena Myakotnikova, Head of SIBUR's Climate Initiatives and Carbon Regulation. A leading expert in the Russian energy sector, Elena recently represented SIBUR at the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28).

Amid the accelerating transition to renewables, she advocates for the petrochemical industry to focus more on developing eco-friendly products and clean energy technologies to secure its long-term sustainability. Furthermore, the collaboration between Russia and China has the potential to provide technological innovations and market opportunities, enabling both nations to jointly propel the petrochemical sector towards a greener and sustainable future.

As Russia’s largest petrochemical company, what have been SIBUR's R&D investments in new energy, new materials, and green technologies in recent years? What is your outlook on the forthcoming trends shaping the green petrochemicals market?

SIBUR actively invests in the development of eco-friendly and renewable energy sources, as well as new materials and green technologies. Just one example is a solar power plant built at our POLIEF facility in Bashkortostan, which is Russia’s major manufacturer of terephthalic acid (TPA) and polyethylene terephthalate (PET). (Note: TPA is a valuable chemical component mainly used in the production of PET, a widely popular thermoplastic found in various applications, including food and beverage packaging like plastic bottles and containers).

The construction of a solar power plant is an important milestone, which both increases the share of green energy in SIBUR’s energy mix and helps us significantly reduce the carbon footprint associated with production.

The plant spans over 8 hectares of land and features 10,080 high-performance double-sided PV modules made of monocrystalline silicon. These modules capture sunlight on both sides, enabling more efficient energy conversion and sustainable energy consumption.

Furthermore, POLIEF uses recycled materials in PET pellet production. Our new Vivilen rPET pellets contain up to 30% of recycled plastic, offering new possibilities for packaging manufacturers who were previously hesitant to utilise secondary polymers due to concerns about investing in additional equipment. Now, our eco-friendly material provides them with an easy pathway to adopt it. Apart from serving as a technological solution, Vivilen rPET also helps foster circular economy.

We also carry out R&D on other recyclable polymers, including such widely used materials as polyethylene, polypropylene, and polystyrene. We do this in collaboration with our partners to explore new ways to use resources more efficiently. In road construction, SIBUR applies advanced zero-waste production technologies for SBS, a polymer that enhances asphalt properties and improves durability and performance of road surfaces.

Overall, our outlook on the future growth of the green petrochemicals market is optimistic. The demand for green technologies is projected to increase as environmental regulations become more stringent and the global focus on sustainability intensifies.

What are SIBUR’s specific initiatives and achievements in fostering sustainability and low-carbon economy?

SIBUR’s pursuit of sustainability and advancing low-carbon economy is anchored in its 2025 Sustainable Development Strategy, which sets out a range of ambitious goals and specific measures to achieve them.

First, we are dedicated to reducing greenhouse gas emissions. Specifically, we aim to cut our emissions in gas processing by 5% (per tonne of products manufactured) and in petrochemicals by 15% (per tonne of products sold). Achieving these targets relies on various innovations and enhancements, such as improving the energy efficiency of our production processes and streamlining process flows.

Second, the Company has launched an extensive initiative to plant at least five million trees to absorb carbon dioxide from the atmosphere. To date, we have already planted over three million trees, contributing not only to a reduction in CO₂ emissions but also to the preservation of biodiversity and ecological balance.

Furthermore, we strive to increase the use of green electricity by five times compared to the 2020 level. This involves expanding the utilisation renewable energy sources such as solar and wind power, as well as upgrading existing energy facilities to enhance their efficiency and environmental sustainability.

Additionally, we aim to achieve carbon neutrality at least at one of our production facilities. To that end, we are implementing various measures, including enhancing production efficiency, increasing the share of renewables in the energy mix, and deploying carbon capture, removal, and storage technologies. We are also actively engaged in sequestration projects.

We are aware that SIBUR is planning to sell carbon units in the Chinese market. Could you provide more details about the reasons behind this plan and the progress in implementing it?

Before addressing this question, it is important to consider the context of global carbon emissions and carbon unit trading. In October 2023, the EU implemented the Carbon Border Adjustment Mechanism (CBAM). Under the CBAM, foreign manufacturers of industrial goods will need to declare the carbon footprint of their products (i. e. total GHG emissions associated with their manufacturing) and pay for any emissions exceeding the EU limits.

Chinese suppliers exporting goods to the EU can reduce their carbon footprint to meet the EU requirements by purchasing carbon units certified by international (preferably European) carbon auditors. We plan to assist exporters from China in doing that.

SIBUR offers certified carbon units that represent actual reduction or removal of greenhouse gas emissions and are verified by internationally recognised carbon auditors. By purchasing these carbon units, Chinese suppliers can offset the carbon footprint of their products and avoid paying carbon duties for exceeding the EU standards.

Our carbon units have been digitised and tokenised for transparent and breach-safe sale via an international blockchain platform thus ensuring their authenticity.

Currently, SIBUR is actively negotiating the sale of carbon units with its partners in China.

What are the features and benefits of carbon units obtained as part of the Russian climate action programme? What is the process for certifying and auditing them?

The carbon units obtained by SIBUR for reducing emissions by ca. 3 mt of CO₂ equivalent as part of a climate project implemented at ZapSibNeftekhim have their own features and advantages.

As confirmed by Verico SCE, Europe’s leading validation and verification body, our carbon units meet ISO 14064-2:2019 – an international standard for quantifying, monitoring and reporting greenhouse gas emission reductions, helping companies properly assess and disclose the impact of their GHG reduction projects.

Thus certified, the carbon units are put on the public distributed ledger (Note: the system keeps record of carbon credits and ensures their transparency and traceability) and assigned a selling price for both the Russian and international market. This provides companies and individuals worldwide with an effective opportunity to offset their carbon footprint and contribute to the global low-carbon cause.

Speaking of our climate projects currently in progress, SIBUR-Khimprom (our Perm facility) was fully endorsed by the CIS Member States Coordination and Information Centre for Regulatory Convergence in July 2023. The project envisages the reduction of GHG emissions associated with the production of DOTP (dioctyl terephthalate), a phthalate-free eco-friendly plasticiser, by adjusting catalyst feeding to boost chemical reactions and cut natural gas consumption per unit of product, thereby reducing CO₂ emissions.

We expect to see the first verification results published and carbon units issued for this project in the near future. We anticipate that the project will reduce our GHG emissions by approximately 15,000 tonnes of CO₂ equivalent by 2025.

How will the petrochemical industry adapt its business models and market strategies to comply with increasingly stringent global energy policies and environmental regulations?

Petrochemical companies should focus on technological innovations while minimising their carbon emissions. If they encounter difficulties in cutting emissions, they can consider offsetting them with carbon credits (note: by supporting environmental projects such as tree planting) and carbon units (note: by purchasing carbon units). SIBUR, for instance, uses these opportunities to offset a minor share of its GHG emissions.

Our major facilities, such as ZapSibNeftekhim and the soon-to-be-launched Amur Gas Chemical Complex, have been built with advanced technologies to effectively handle emissions.

When acquiring carbon units, it is also very important to adopt an individual approach and have full trust in their authenticity. SIBUR offers only top-notch carbon units that are fully and rigorously verified (note: all carbon projects undergo meticulous scrutiny to validate their actual input, including certification by reputable third-party organisations).

Sourse: Interview for the Economic Observer. Full version