The energy dialogue between the EU and Russia The Kyoto Protocol

 Initial phase  1991 : TACIS programme 1994 : Signature of the Partnership and Co-operation Agreement (PCA)  Intensification 1997 : Entry into force of the Partnership and Co-operation Agreement (PCA) : trade (WTO based, MFN trade rules), political dialogue, justice & home affairs (co-operation to prevent illegal activities, drugs, money laundering, organised crime), institutions : EU Common Strategy on Russia : integration into a common European economic and social space. Russian Common Strategy towards the EU : construction of a Europe without dividing lines Northern Dimension : answer to the special regional development challenges of northern Europe.  Producing concrete results 2000 : Energy Dialogue launched - an important element in the concept of the : Proposal for a Common European Economic Space 2002 : « Wider Europe » initiative 2003 : Sankt Petersburg Summit : concept of four common spaces EU-Russia Relationship A reminder

The four Spaces Common Economic Space Common Space of Freedom, Security and Justice Common Space of Co-operation in the Field of External Security Common Space of Research and Education

The Common Institutions A reminder

 Where : The EU-Russia Summit in Paris  When : 30th October 2000  Nomination of two sole interlocutors : Mr François Lamoureux, Director General of the European Commission and Vice-Prime Minister of the Russian Federation, Viktor Khristenko  Objectives  progress in the definition of an EU-Russia energy partnership,  contribute to the security in energy supply as well as in energy demand,  cooperation on energy saving,  rationalisation of production and transport infrastructures and importance of electricity interconnections,  facilitate investments,  contribute to the relations between producer and consumer countries,  support the Energy Charter Treaty  contribution to the ratification of the Kyoto protocole The Energy Dialogue EU-Russia

The Climatic Contrast Source : The Siberian Curse, Fiona Hill and Clifford Gaddy, Brookings Institution Press, It gets colder from West to East not necessarily from South to North

Difficult Demographics

Ricardo law of comparative dis(advantages) T° (in Brussels March ° C Population 2003(million) Novosibirsk Yekaterinburg Omsk Chelyabinsk Ufa Perm Krasnoyarsk Kabarovsk Barnaul Irkutzk Novokuznetzk Tomsk Kemerovo Ulan-ude Bratsk Yakutzk Norilsk

Energy production (Mio toe) Renewables Nuclear Gas Oil Coal Europe (EU-25) Russia Sources: Russian Federation: 2003 Russia’s Energy Strategy until 2020, European Commission.

Energy Security: Energy imports and exports (in mtoe) EU Energy Imports Russian Energy Exports Sources: Russian Federation : Russia’s strategy until 2020, European Commission : trends to 2030

The importance of the European market GAZPROM Sales and Receipts Sources : IEA, European Commission, Gazprom Export price to Europe $ 130 / 1000 m3 Domestic price to households $16 / 1000 m3 Domestic price to industry $ 23 / 1000 m3 Gas volumes Russia 63% Receipts from gas sales Russia 35,5% Europe and others 64,5 % Europe and others 37 % Required price to finance investments 2006 : $ 41/1000 M : $ 62-70/1000M3

Electricity production by fuel EUR 25 Russia Sources : Russian Federation : 2003 Russia’s Energy Strategy until 2020, European Commission : Trends to 2030

Nuclear power plants : production capacity in Gwe (2000 – 2020) Sources USEIA; Minatom; Russian Federation : 2003 Russia’s Energy Strategy until 2020; European Commission : Trends to Russia

Nuclear power plants : load factor Source : Minatom

Energy Intensity Natural Gas Electricity 0 0,2 0,4 0,6 0,8 1 1, RussiaEU Koe per Euro of GDP 0 0,5 1 1,5 2 2,5 3 3, RussiaEU KWh/ Euro of GDP Sources: Russian Federation : Russia’s strategy until 2020, European Commission : trends to 2030 Adj. PPP Adj PPP

Potential for Energy Conservation in Russia A. Mastepanov, Ministry of Energy, Russian Federation

CO2 Emissions (million tonnes)

Russia Energy Sector Investment requirements Total requirements € 715 thousand million Sources : Russian Federation : Russia’s Energy strategy until 2020 and European Commission.

Why should Russia ratify The Kyoto protocol is not a constraint on Russia’s economic growth - Russia will most likely still be below its 1990 level in No doubt that it will meet its obligations; - Huge potential for energy conservation; - Emission trading will benefit Russia as will Joint implementation. Ratification by Russia of the Kyoto protocol will enable its entry into force and contribute to confirm the role of Russia as a global and responsible player in the environmental field. Ratification will be welcomed by developing countries that expect vast investments through the Clean Development Mechanism.