The Current State of the Green Sectors of the Economy in the

Conditions of Innovative Transformation

I. Shakhgiraev

, G. S. Sultanov

and G. U. Magomedbekov

Chechen State University, Grozny named after A.A. Kadyrova, Grozny, Russian Federation

Daghestan State University, Makhachkala, Russian Federation

Keywords: Green sectors, climate, carbon, energy sources consumption, territory, morphological features,

transformation.

Abstract: The basis of the Russian energy sector is natural gas: it accounted for 60% of primary energy consumption in

2018. The structure of the Russian energy sector from an environmental point of view is more favorable than

in many other major economies of the world. In particular, in India and China, the basis of primary energy

consumption is coal (more than 40% and more than 60%, respectively), the most polluting fossil fuel.

However, in terms of the development of renewable energy sources, Russia lags far behind the world.

Hydropower is well developed in Russia: it accounts for about 3% of primary energy consumption and 17.6%

of electricity generation. At the same time, most Russian HPPs were built even before the start of the transition

to a market economy and are large projects characterized by significant environmental damage. The rest of

the RES, including the world's most dynamically developing areas such as solar and wind energy, are at the

initial stage of development in Russia: they accounted for only 0.03% of primary energy consumption in 2018

and 0.28% of electricity generation in 2019. For comparison, according to REN21, in the world, modern RES,

excluding hydropower and traditional biomass, already provided 7.4% of primary energy consumption in

2018 and 11.4% of electricity generation at the end of 2019. According to Ember, Russia is the largest

economy in the world, which has practically no modern renewable energy.

1 INTRODUCTION

In Russia, there is also a significant lag behind other

countries in the field of reducing the energy intensity

of GDP. According to the Ministry of Economic

Development, the most rapid progress in this area was

observed from 2000 to 2008, when the Russian

economy was shifting to less energy-intensive

industries and the reduction in energy intensity of

GDP was 35%. Then progress in this area slowed

down, and in the period from 2008 to 2018 it was

possible to reduce the value of this indicator by only

9%. In 2018, the energy intensity of Russian GDP

exceeded the global average by 46% (Ministry of

Energy and Environmental Protection, 2008). The

development of renewable energy technologies and

the improvement of energy efficiency are limited by

the conservative and extremely inertial state policy in

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the energy sector, as well as the low cost of traditional

energy resources. Traditional energy in Russia enjoys

significant government support. In 2017, according to

estimates by the International Renewable Energy

Agency (IRENA), Russia ranked fourth in the world

in fossil fuel subsidies after Iran, Saudi Arabia and

China (Dedicoat, 2016). The amount of Russian

energy subsidies was almost evenly distributed

among the oil, gas and electricity sectors, and their

total amount was almost 30 billion US dollars per

year. The subsidization of renewable energy sources

in Russia, however, is so insignificant that data on it

are not available. In recent years, renewable energy

sources have been provided with incentive state

regulation in the wholesale electricity and capacity

market,as well as in retail electricity markets; in the

near future, support for microgeneration due to

renewable energy sources with a connection to the

Shakhgiraev, I., Sultanov, G. and Magomedbekov, G.

The Current State of the Green Sectors of the Economy in the Conditions of Innovative Transformation.

DOI: 10.5220/0011556400003524

In Proceedings of the 1st International Conference on Methods, Models, Technologies for Sustainable Development (MMTGE 2022) - Agroclimatic Projects and Carbon Neutrality, pages

147-152

ISBN: 978-989-758-608-8

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

147

grid will begin to function. As a result, in the period

from 2014 to 2019 inclusive, RES-based power plants

were built in Russia with a total capacity of 1.7 GW.

However, this is equivalent to only 0.7% of installed

capacity and about 0.2% of generation (Global

Environment Forum, 2014). By 2025, 5.4 GW of

renewable energy power plants or less than 2.5% of

installed capacity will be built on the wholesale

electricity and capacity market, which will provide

less than 1.2% of generation (Agenda for the 21st

century, 1992).

According to the Association for the

Development of Renewable Energy (ARVE), in

accordance with the existing plans for the

development of renewable energy, in Russia by 2030

it will be possible to avoid emissions of 12 million

tons of greenhouse gases into the atmosphere, which

is equivalent to only 1% of the total emissions in

Russia (Sukhinina, 2013). This decline is

unacceptably low and inconsistent with the goals of

the Paris Climate Agreement. Currently, none of the

state programs related to the development of the

transport complex of the Russian Federation or its

individual elements, as well as the regulation of the

sphere of control of emissions of harmful substances

into the atmosphere, does not provide for the

implementation of measures directly aimed at

reducing greenhouse gas emissions. According to

NIIAT and MADI experts, risks of growth in gross

greenhouse gas emissions from road transport remain

in the forecast period due to (Federal Law No. 174-

FZ, 1995):

− continuing the trend towards an increase in the

age of the car fleet, an increase in fuel

consumption and greenhouse gas emissions

due to the absence of a state program for the

recycling of cars and a national system for the

recycling of transport equipment;

− the absence of regulatory requirements for

mileage (per 1 km) greenhouse gas emissions

of new cars supplied to the domestic market,

which leads to the fact that the level of

greenhouse gas emissions of domestic cars

(VAZ, GAZ, UAZ) is 1.5–2 times higher than

norms emissions adopted in the European

Union;

− preservation of the stereotype of transport

behavior of owners of private cars and the

growth of motorization in large cities;

− lack of an effective system for monitoring the

technical condition of cars of individual owners

in operation due to the destruction of the state

technical inspection system, as well as due state

control over the quality of petroleum products

sold and their compliance with the

requirements of the Technical Regulations of

Vehicles;

− lack of reliable statistics on annual car mileage,

which hinders incentives to reduce greenhouse

gas emissions by replacing the transport tax

with an environmental payment;

− non-fulfillment of state plans and programs for

the gasification of road transport in terms of

achieving target indicators for increasing the

number of gas-balloon automatic telephone

exchanges (natural gas), automobile gas-filling

compressor stations (CNG filling stations).

The electrification of the transport sector is

proceeding at an extremely slow pace. In 2020, there

were only 6.3 thousand electric vehicles in Russia

(0.014% of all vehicles), of which more than 90%

were used. In total, there are about 400 charging

stations in the country. At the same time, more than a

million new electric vehicles were sold in China in

2019. Policies to stimulate the development of RES

in the heating and cooling sector, as well as in the

transport sector, are not implemented in Russia; there

are no reliable statistics in these areas. However,

according to industry participants, the demand for

some renewable energy technologies, in particular

heat pumps and pellet boilers, has recently been

growing, primarily in the SME sector, and especially

during a pandemic. This is due to the economic

efficiency of these technologies. In the world, the

heating and cooling sector, and even more so the

transport sector, lags behind the electric power

industry in terms of the introduction of renewable

energy. At the end of 2019, RES generated 27.3% of

all electricity in the world, including hydroelectric

power plants, and 11.4% without them. In the

heating/cooling sector and in the transport sector, the

share of RES was 10.1% and 3.3%, respectively,

excluding traditional biomass (Agenda for the 21st

century, 1992; Sukhinina, 2013). However, in the

near future, the spread of renewable energy sources in

these sectors will accelerate due to their

electrification, as well as in connection with the

development of green hydrogen as a new energy

carrier (Shakhgiraev, 2019).

The world has high hopes for Power-To-X

technologies, which will allow converting electricity

generated by renewable energy sources into new

carbon-neutral fuels. Unlike electricity, these fuels

will not be consumed at the time of production, but at

any time, and they will be easy to transport. Green

hydrogen is one example of PowerTo-X. These

technologies are expected to accelerate the energy

transition in the heating and transport sectors. Russia

MMTGE 2022 - I International Conference "Methods, models, technologies for sustainable development: agroclimatic projects and carbon

neutrality", Kadyrov Chechen State University Chechen Republic, Grozny, st. Sher

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has not yet taken measures aimed at the development

of Power-To-X technologies.

Russia has not achieved the clean energy goals it

set for itself. Thus, by 2020 it was planned to increase

the share of renewable energy sources in electricity

generation to 4.5%, excluding large hydroelectric

power plants. This goal has not been achieved:

according to Rosstat, in 2019 the value of this

indicator was only 0.28%. It was also planned to

reduce the energy intensity of Russian GDP by 40%

by 2020 compared to 2007 levels. In reality, the

decline was only about 10%. Currently, Russia does

not have any relevant clean energy goals and does not

plan to abandon coal generation, and also intends to

increase coal production and exports until at least

2035. This is contrary to global trends and secures

Russia's dependence on raw materials (Kadner,

2021).

2 RESEARCH METHODS

The breakdown of non-fossil fuel emissions is shown

in the infographic below. The main sources of

emissions in the industrial sector of Russia are: (1)

metallurgy - it accounts for 44% of the sector's

emissions, of which 39% is from the production of

iron and steel; (2) the chemical industry – it accounts

for 32% of the sector's emissions, of which 16% is

accounted for by the production of ammonia, which

is used mainly for the production of fertilizers in

agriculture (Federal Law No. 174-FZ, 1995;

Shakhgiraev, 2019);

(3) production of mineral materials - it accounts

for another 15% of the sector's emissions, of which

8% is the result of cement production. The key

sources of greenhouse gas emissions in the

agricultural sector are direct nitrous oxide emissions

from agricultural soils (41%) and methane emissions

from internal (enteric) fermentation of domestic

animals (39%). Manure collection and storage

systems accounted for another 11.5% of all emissions

from the agricultural sector in 2018. The bulk of

emissions in the waste sector are methane emissions

from controlled waste disposal sites (66%). Since

1995, Russia has seen a steady increase in greenhouse

gas emissions from waste, mainly due to an increase

in the amount of municipal solid waste accumulated

in landfills. The increase in emissions from waste in

2018 compared to 1990 was 64.7%. In the Inventory

of anthropogenic emissions from sources and

removals by sinks of greenhouse gases for 2020,

waste is understood as "remains of raw materials,

materials, semi-finished products, other products or

products that were formed in the process of

production or consumption, as well as goods that have

lost their consumer properties." The calculation of

greenhouse gas emissions includes both solid

municipal and solid industrial waste, including

agricultural waste, except for emissions from manure

management, which are assigned to the "Agriculture"

sector. In 2018, solid municipal waste in Russia

accounted for almost 82% of all methane emissions

from solid waste disposal, the remaining 18% came

from emissions from industrial solid waste. Most of

all waste is placed in large and very large controlled

landfills. A small part of the waste is incinerated, with

little or no prior sorting, which is a serious

environmental problem (Eurostat, 2021).

The greenhouse gas emissions described above

are due to human activities and do not include

emissions from fossil fuel combustion. They are

directly related to the 12th Sustainable Development

Goal - "Responsible consumption and production",

and their reduction is possible due to the introduction

of the principles of the circular economy. These

principles are based on the transition from a linear

model of the economy, which includes three main

stages: (1) resource extraction, (2) production and (3)

waste generation, to a regenerative model. A

regenerative or circular economy uses renewable

energy, recycled and safe materials and generates

almost no waste. Data from the 2020 Inventory of

Anthropogenic Emissions from Sources and

Removals by Sinks of Greenhouse Gases estimate

that in 2018, 63% of greenhouse gas emissions from

industrial processes came from the production of

three materials: (1) iron and steel, (2) ammonia, and

(3) cement. Together with the agricultural sector,

emissions from these sectors accounted for nearly

60% of non-fossil fuel emissions. This means that in

order to significantly reduce emissions in the non-

energy sector, it is first necessary to introduce the

principles of a circular economy in the production and

consumption of iron and steel, ammonia, cement, as

well as in agriculture. Similar conclusions are

contained in foreign reports. According to a study by

the Ellen MacArthur Foundation, which takes into

account in industrial emissions emissions from the

combustion of fossil fuels necessary to power

production processes in the world (Kadner, 2021;

Maliene, 2010).

Cement, steel, plastic and aluminum production

accounts for 60% of industrial sector emissions. Also,

according to the study, by 2050, almost half of global

emissions from manufacturing processes can be

avoided if the principles of the circular economy are

implemented in five industries: cement, aluminum,

The Current State of the Green Sectors of the Economy in the Conditions of Innovative Transformation

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steel, plastics and food. In the IRENA report, iron and

steel production, chemical and petrochemical

production, cement and aluminum production are

among the most energy-intensive and difficult to

decarbonize industries. Steel, cement, plastic and

ammonia are the key materials for the EU economy,

accounting for about 20% of all greenhouse gas

emissions, according to a Material Economics report

on emission reduction opportunities in EU heavy

industry. In Russia, non-fossil fuel emissions from

aluminum production accounted for 1.3% of all

industrial emissions in 2018, and aluminum was not

among the top emitters. At the same time, the

aluminum industry is one of the most energy-

consuming, and Russia ranks second in the world in

aluminum production. All things considered, the

Russian Green Deal circular economy program is

focused on reducing emissions from metallurgy,

cement, ammonia and food production. Systematic

work to reduce these emissions is currently not being

carried out in Russia.

3 RESULTS AND DISCUSSIONS

The main sources of emissions in the manufacturing

sector are (Shakhgiraev, 2019; Kadner, 2021;

Maliene, 2010):

1. High-temperature processes. For example, the

melting and shaping of steel and the production

of cement clinker require temperatures of 850–

1600 °C. Electricity is already being used for

some of these processes, notably in electric arc

furnaces for steelmaking, but in most cases

technology does not yet allow it to be used.

2. Emissions during production. In the production

of steel, cement and plastics, carbon is used not

only to provide high-temperature conditions,

but also as an integral part of the chemical

process, which leads to significant carbon

dioxide emissions. For example, in cement

production, calcining limestone to produce

calcium oxide releases a large amount of

carbon contained in the rock. Eliminating such

outliers is the most difficult. To reduce these

emissions, the fundamentals of manufacturing

processes need to be changed.

3. Emissions after end-of-life. Currently, the vast

majority of materials, with the exception of

metals, end up in landfills or incineration at the

end of their lives, releasing large amounts of

greenhouse gases. For example, when burning

plastic, an average of 2.7 kg of CO₂ is released

per 1 kg of plastic.

The recycling of materials usually requires much

less energy than the production of new materials. For

example, the production of recycled steel requires

only 10-15% of the energy that would be spent on the

production of new steel. When processing materials,

it is usually possible to use electricity, which can be

produced by renewable energy sources. Another

important aspect of recycling is that it reduces not

only greenhouse gas emissions from burning fossil

fuels, but also emissions from manufacturing

processes, which are particularly difficult to reduce.

Thus, in industrial sectors, the most important

principles should be (1) reducing waste generation,

(2) significantly increasing the utilization rates of

assets, especially buildings and equipment (i.e.

reducing the need for new cement, steel and

aluminum), (3) recycling in the use of products and

the use of secondary resources. This will reduce the

demand for new steel, aluminium, cement, plastic,

and hence the emissions from their production. The

first group of measures can be implemented by

reducing the generation of waste at all stages of

production and consumption of products and

increasing the efficiency of resource use. The second

group of measures can be implemented through the

promotion of product sharing (sharing), the

development of rental services, and the extension of

the service life of goods. As for recycling, for some

materials (for example, for steel) it has already been

established, and electricity, including from renewable

sources, can be used to provide energy. But there is

significant potential to increase the share of steel

recycled and the quality of scrap metal collected.

Recycling of other materials, such as plastic, needs to

be significantly increased through the development of

collection and sorting of plastic waste. Emissions

from ammonia production can be reduced primarily

through the development of agriculture with minimal

use of fertilizers - regenerative or organic agriculture

(Kadner, 2021).

The solution to this problem is closely related to

the transition to sustainable agricultural practices and

sustainable diets. The Russian organic food market is

at the initial stage of development. Sustainable diets,

which should be understood as diets with a higher

content of plant products compared to animals, are

not common in Russia. At the same time, according

to available estimates, about 75% of an individual's

carbon footprint falls on three areas: food, housing,

mobility. Therefore, along with the use of energy

from fossil fuels and travel by private cars and planes,

the overconsumption of meat and dairy products are

among the areas for action with the greatest potential

for reducing lifestyle-related greenhouse gas

MMTGE 2022 - I International Conference "Methods, models, technologies for sustainable development: agroclimatic projects and carbon

neutrality", Kadyrov Chechen State University Chechen Republic, Grozny, st. Sher

150

emissions. According to the IPCC report "1.5

degrees", achieving the goal of not exceeding the

increase in the average global temperature by more

than 1.5 ° C requires action not only at the level of the

state and business, but also fundamental changes in

the way of life of people. At the same time, changes

in diets in the direction of reducing the consumption

of meat products are given in the report as one of the

examples of necessary measures. Today, per capita

greenhouse gas emissions from food consumption in

Russia are more than double the levels compatible

with avoiding a global average temperature increase

of more than 1.5°C. There are no official guidelines

for sustainable diets in the country (Federal Law No.

174-FZ, 1995).

In recent years, Russia has taken measures aimed

at the transition to more rational models of production

and consumption. Clause 2 of Article 3 of the Federal

Law “On Production and Consumption Wastes”

dated June 24, 1998 No. 89-FZ fixed the hierarchy of

priority areas of state policy in the field of waste

management: (1) maximum use of raw materials and

raw materials; (2) waste prevention; (3) reducing the

generation of waste and reducing the hazard class of

waste at its source (Eurostat, 2021). Government

Decree No. 1589‑r dated July 25, 2017 approved a list

of types of production and consumption waste

containing useful components, the disposal of which

is prohibited. Some of the items on this list (scrap and

waste containing ferrous and non-ferrous metals,

lamps and waste containing mercury) are prohibited

from burying from January 1, 2018, the rest of the

waste - from January 1, 2019 (paper, cardboard, tires,

polyethylene and polypropylene waste, glass

containers) and from January 1, 2021 (electronic

devices, including computers and parts thereof,

telephones, voice recorders, etc.; electrical

appliances, including refrigerators, kettles, electric

coffee makers, microwave ovens, air conditioners,

etc.; banking equipment, accumulators, wires and

cables) (Maliene, 2010).

Businesses and non-profit organizations are

involved in the process of solving the problem of

responsible production and consumption by

implementing projects to recycle waste and refuse

disposable goods and packaging; the sharing

economy begins to develop in the country. In most

large settlements, infrastructure for separate waste

collection has been created - access to it is available

in more than 80% of cities with a population of over

100,000 people. At the same time, not all container

sites are equipped with tanks for separate collection

of waste, and as a result, such collection is available

to less than 20% of the country's population. The

culture of separate collection is not well developed in

Russia, which negatively affects the volume of

collection of recyclables and its quality.

4 CONCLUSIONS

The Strategy for the Development of the Industry for

the Processing, Recycling and Neutralization of

Production and Consumption Waste for the period up

to 2030 sets an ambitious goal - to increase the share

of MSW recycling in Russia from 8.9% in 2016 to

80% by 2030. The document spells out the 3R

principle (prevention of waste generation, reuse,

recycling into secondary resources), but at the same

time, not a single action from the action plan of the

strategy is aimed at reducing the volume of waste

generation. The document focuses on work with

already generated waste: processing of the general

flow of MSW, disposal, incineration in cement kilns.

Public procurement is currently not focused on waste

prevention and promotion of the development of a

circular economy. In the Federal Law of April 4, 2014

No. 44 (law on public procurement), the

environmental characteristics of the procurement

object are mentioned as one of the possible criteria for

evaluating applications for the execution of a state

contract. However, there are no mechanisms or

specific general requirements to encourage the setting

of environmental criteria. This means that the

environmental criterion can only be used if there is a

certain interest of the enterprise, making the purchase.

Recently, the world has been implementing the “zero

waste” approach based on changing patterns of

resource and product use. As a result of conscious

lean consumption and use, waste generation is

reduced, reuse, repair, recycling and composting are

promoted. By 2050, the implementation of this

approach only in the waste management sector can

reduce global greenhouse gas emissions ranging from

3% of the 1990 level to 9% of the current level.

Emission reduction in the waste sector is based on

three main areas of action: waste prevention;

increasing the reuse, recycling and composting of

waste; technological innovations to reduce emissions

from landfills and wastewater. The “zero waste”

approach also makes it possible to radically reduce

emissions in other sectors, since consumer waste is

directly related to the production of consumer goods,

and therefore to the extraction of primary resources,

transportation, processing and production. The

contribution of the consumer goods sector to annual

greenhouse gas emissions is about 45%, and a circular

economy with a focus on reducing the use of raw

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materials and materials (zero waste principles) can

reduce annual greenhouse gas emissions from a

reduction in primary production and resource use by

40% or by 3.7 billion tons by 2050 (Kadner, 2021).

Changing consumption patterns and reducing

packaging can reduce waste by at least 1% per year.

The reduction of greenhouse gas emissions will

amount to more than 800 million tons of CO2-eq.

Waste prevention, the promotion of reuse systems,

new delivery systems and downstream recycling and

composting can reduce waste generation and

emissions from landfills and incinerators by up to

90%, reducing emissions by more than 500 MtCO2-

eq. In general, in Russia there is no coordinated

movement towards a circular economy and

corresponding new business models, there are only a

few examples of the introduction of elements of such

an economy (Shakhgiraev, 2019; Kadner, 2021).

Also, there are no attempts to systematically

implement the principle of "zero waste" at the

national level. Thus, we can conclude that Russia has

so far achieved little in this area, and in order to

change this situation, a lot of work remains to be done

in the coming years.

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neutrality", Kadyrov Chechen State University Chechen Republic, Grozny, st. Sher

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