Rusal Splits High Carbon Assets Ahead Of EU Carbon Tax

Russian aluminium giant Rusal announced Wednesday that it would turn its high carbon assets into a separate company, as businesses brace for the European Union's proposed carbon tax on imports

Moscow, (APP - UrduPoint / Pakistan Point News - 19th May, 2021 ) :Russian aluminium giant Rusal announced Wednesday that it would turn its high carbon assets into a separate company, as businesses brace for the European Union's proposed carbon tax on imports.

The European Parliament last month endorsed the creation of a carbon border tax that would shield EU companies against cheaper imports from countries with weaker climate policies.

The mechanism is intended to make sure that imports from outside Europe do not have an unfair advantage if manufactured with a bigger carbon footprint.

The tax would come down hard on companies in Russia, which is one of the biggest suppliers of carbon-intensive products to Europe.

In a statement, Rusal said it "is pursuing a demerger of its higher carbon assets to unlock value through the creation of two businesses with separate strategies." Separated from the higher carbon assets, Rusal, which was founded by oligarch Oleg Deripaska, will focus on "reinforcing its position as a leading producer of low-carbon aluminium", the statement said.

It said that the group would be "committed to providing the market with the lowest carbon footprint aluminium possible".

The statement said that Rusal's management has also proposed rebranding the company as AL+, with the board of directors set to consider the proposal next month.

It did not provide a name for the new company, which will take on Rusal's dirtiest assets and "focus on the development of the domestic market." Russia, a key market for Rusal, does not have a domestic carbon tax and some critics accuse the government of not paying enough attention to environmental concerns.

Rusal is not the first Russian company to separate its polluting activities in anticipation of the EU carbon border tax.

Power company EuroSibEnergo and steel producer Evraz, controlled by billionaire Roman Abramovich, announced similar measures earlier this year.

In January, Rusal's holding company EN+ -- which also owns EuroSibEnergo -- was one of the first Russian companies to pledge to reduce its greenhouse gas emissions.

It said it would cut emissions by 35 percent by 2030 and achieve carbon neutrality by 2050 -- in line with the EU's Green Deal.