Bound for decarbonization

As one of the world's largest companies specializing in railway transportation, Russian Railways closely monitors global market processes and factors that affect competitiveness. At present, strict requirements for the greening and decarbonization of economic activities are emerging at the international level, and their consideration in the development strategy of a large business such as Russian Railways will be a determining factor of investment attractiveness in the future.

Russian Railways strictly follows the comprehensive and indivisible principles of sustainable development ensuring a balance between all three components of sustainable development: economic, social and environmental.

The company consistently holds a leading position among the world's rail carriers in terms of energy efficiency and environmental friendliness of freight and passenger transportation. 

The railway sector is a driving element of the transportation system. Today, its share in passenger and freight carriage accounts for more than 40% of all transportation in the country. 

"Russian Railways operates on the territory of 77 constituent entities of the Russian Federation and is a link in the international transport system, while its share in the total environmental impact of all businesses operating in the country is less than 1%. It includes 0.8% of atmospheric emissions, 0.01% of waste water discharge into the country’s water bodies, and 0.02% of waste generation", - says Andrey Lisitsyn, the head of the Ecology and Technosphere Safety Department of Russian Railways.


Up to 2035 Strategy

The new Environmental Strategy of Russian Railways, which is now being revised towards more ambitious targets, is designed for the next decade. 

"In developing Russian Railways' Environmental Strategy we are guided by the national development goals of creating a comfortable and safe environment for the population, as well as the goals and objectives of sustainable development," Andrey Lisitsyn told "1520.International".
The main priorities of the strategy will be: improving energy efficiency, minimizing the impact of industrial activity in the territories of the company's presence, and ensuring the elimination of objects of accumulated environmental damage. 

Currently the main "green" projects of Russian Railways are infrastructure electrification and the use of electric traction, the operation of locomotives driven by alternative fuels - gas turbine locomotives and gas engine locomotives - and the use of renewable energy sources.


Electrification and traction

Thus, for the period up to 2024, the holding company’s plans include the electrification of sections with a total length of more than 1,400 km. Over the past two years, major comprehensive projects have been implemented to electrify railway lines on the Gatchina - Luzhskaya section, the Taman Peninsula mainline, and the Borzya - Zabaikalsk section.

To reduce emissions, Russian Railways acquires modern domestic rolling stock with improved environmental performance. Last year the network received 535 locomotives, including 277 electrically-driven locomotives (264 freight locomotives and 13 passenger ones). The purchase of 258 new series diesel locomotives in 2021 made it possible to reduce emissions of harmful substances into the atmosphere. It is worth mentioning a significant reduction of emissions achieved by operation of 2TE25km series locomotives. Due to the use of mainline diesel locomotives of this model, atmospheric emissions were reduced by 3,200 tons, or 75% of the total effect in 2021. There are plans to purchase 522 locomotives this year.

Today, the electric traction transportation of Russian Railways accounts for more than 86% of freight and 85% of passengers. For example, a trip of one passenger from St. Petersburg to Moscow by train emits almost 4 times less CO2 than a trip by car and almost 5 times less than by aircraft.

Concurrently with the renewal of the traction fleet with new locomotive models the holding company is implementing projects to create environmentally friendly traction rolling stock. In 2020, the company's subsidiary research institutes (VNIKTI and VNIIZhT, the author's note) developed options for layout solutions and the selection of basic equipment for upgrading shunting and mainline diesel locomotives to run on natural gas. The implementation of these plans will ensure the replacement of 11% of diesel fuel consumption by natural gas by 2024 and 25% by 2030.

The next direction is related to the use of hybrid battery-powered rolling stock. In November 2021, development of design documentation was completed and production of two prototypes of hybrid EMKA2 shunting locomotives started. Testing of the first locomotive is scheduled to begin in Q3 2022.  A hybrid electric train with lithium-ion batteries based on the Lastochka train is under development.

Jointly with its partners, Rosatom and Transmashholding, Russian Railways has launched a pilot project for the use of hydrogen fuel cell trains on Sakhalin Island. The project provides for the development of a comprehensive hydrogen technology including hydrogen production and transportation, train operation and maintenance, and setting-up an expert and educational center. The hydrogen energy source is characterized by a dramatic reduction in rolling stock noise and absence of emissions resulting in the greenhouse effect.


Production and consumption waste management

It should be noted that Russian Railways produces about 1.5 million tons of waste annually. Of these, 14-16% is subject to burial. The rest is transferred to specialized third-party organizations, recycled and neutralized at own facilities in accordance with the license of Russian Railways, which was re-issued on December 21, 2021 (No. (77) 770370-STOUBR/P).

The burial indicator will be improved by 2035 in accordance with the plans outlined in the Environmental Strategy. With Russian Railways annually generating about 1.5 million tons of production and consumption waste, a reduction of at least 50% of waste disposal by 2030 has been adopted as a target benchmark - subject to the implementation of the innovative scenario.

"Russian Railways consistently implements a development policy for environmental culture of modern sustainable waste management based on the principles of closed-loop economy," reports the deputy head of the Ecology and Technosphere Safety Department Maxim Polishchuk. "Last year alone, 120 various events were held aimed at increasing the waste recycling level."

The Oktyabrskaya, Moscow, Gorkovskaya and Sverdlovskaya railways have established and are operating integrated facilities for recycling reinforced concrete sleepers for subsequent production of construction crushed stone and refined scrap reinforcing steel. According to Russian Railways, a total of 47,500 concrete sleepers were recycled last year. 

The company is also implementing a program of production and consumption waste neutralization at its own facilities. In Yaroslavl and at Tagul station there are two complexes for thermal neutralization of waste. This year they have already neutralized over 2,200 tons of industrial waste, 779 tons of biological and medical waste and 91,300 pieces of waste wooden sleepers. In the near future the holding company plans to continue increasing its waste neutralization capacity for used wooden sleepers and oily waste, including at the existing facilities, for example, at Tagul station of the East Siberian railway. Its plans include further development of the waste recycling integrated facility at the Research and Production Center for Environmental Protection - a branch of Russian Railways (Yaroslavl). After relocation to a new site within the boundaries of the Northern Railway and following major upgrading, the facility will continue processing oily, biological and medical waste using the latest technologies based on the principles of a closed-loop economy.

Technological lines for recycling waste rubber products and automobile tires at Perm-Sortirovochnaya station of the Sverdlovsk railway and Ukladochny station of the West Siberian railway have also showed their efficiency. Their capacity is also planned to be increased. "In 2021, the facilities recycled about 444 tons of rubber waste and produced 269 tons of crumb and 7,104,000 square meters of rubber flooring," said Maxim Polishchuk.

By July 1 this year, it is planned to determine the best location on the network for heating installations that could be fueled by waste wooden sleepers.


Environmental calculator

The company not only calculates its own greenhouse gas reductions, but has made it possible for its shippers to do the same by creating the Russian Railways Environmental Calculator. 

The calculator is available in the customer's Personal Area and allows calculating the reduction of CO2 emissions during the transportation of goods by rail* (compared to road transport).

In the future, the online calculator will make it possible to improve the environmental technology of product delivery by selecting the best modes and routes of transportation, as well as to monitor the efficiency of rolling stock use and loading. 


Investment in decarbonization

"Now we are updating the Environmental Strategy up to the year 2035, which covers all areas of environmental protection activities from carbon intensity reduction to biodiversity conservation, which will allow us to continue attracting funding tied to the implementation of environmental indicators," says Andrey Lisitsyn. 
Russian Railways is actively raising and maintaining its status as a responsible borrower. The company has been present in international capital markets for more than 10 years and funds have always been raised for investment projects, many of which conformed to the principles of green or social financing in the past as well. 

"In 2019, we emphasized the intended purpose of the bonds and became the first Russian company to place "green" Eurobonds in the international capital market," reports Anastasia Shakhanova, deputy head of the Corporate Finance Department. "To attract green financing, we have developed a Concept for Financing Sustainable Development Projects in accordance with the Green Bond Principles of the International Capital Markets Association, the Low-Carbon Transport Standards of the Climate Bond Initiative, and, starting from 2020, the Concept also complies with the Methodological Recommendations of VEB.RF".

In addition, the company presented its own methodology for assessing the reduction of CO2 emissions when financing the purchase of Lastochka electric trains by switching passenger traffic from road to rail, and also developed a methodology for assessing the environmental efficiency of freight transportation by rail using electric locomotives.

"To develop sustainable financing instruments, in 2021 Russian Railways implemented a tool, which is new for the transport industry - an international ESG loan tied to the performance of environmental KPIs. Lent by Unicredit Bank, the transaction amounted to 585 million Swiss francs. The loan rate may be reduced due to the fulfillment of Russian Railways' sustainable development targets," - said Anastasia Shakhanova.

Currently, Russian Railways remains the only company representing Russia in the international market of "green" bonds, as well as the largest ESG borrower in the Russian market.

Sergei Volkov

17 may 2022