Trends

7 key climate trends embraced by Nornickel in 2025

Nornickel boasts low GHG emissions compared to other non-ferrous metallurgy enterprises. Still, the company is committed to further reducing its emissions and achieving the national climate targets.
In 2025, Nornickel will continue its efforts in the key action areas:

  1. Develop climate projects and issue carbon units (CUs);
  2. Expand the list of group companies reporting their GHG emissions to the Russian Ministry of Economic Development;
  3. Study the absorption capacity of tailings ponds (active and forced mineralization);
  4. Enhance climate reporting;
  5. Solidify the climate risk management practices;
  6. Improve monitoring of weather conditions and associated phenomena;
  7. Incorporate climate change in construction standards.

Let’s examine each action area in more detail. Olga Iontseva, Chief Engineer of Nornickel Environmental Department, speaks about the company’s plans to reduce gross emissions and carbon footprint of products.

1. Development of carbon regulation

In 2025, the company plans to implement climate projects and issue carbon units.

Many counties today are actively developing their carbon unit registries and markets, adopting their national standards and rules on climate project registration and CU issuance. To streamline activities in the global markets and simplify the global trading process, massive efforts are being undertaken worldwide to create a single framework of standards and specifications for climate projects and issued carbon units.
The Russian carbon unit market has advanced greatly. In particular, the Sakhalin Experiment has been initiated, setting the goal for the Sakhalin region to become carbon neutral by 2025, i.e. to create a carbon-neutral territory. To achieve this goal, a carbon fee charging mechanism will be developed and trialed.
OLGA IONTSEVA:

“The experiment is set for completion in 2028, but the first results are expected after the Russian Ministry of Economic Development finalizes their reporting session for 2024. Large enterprises are looking forward to seeing the deliverables, to understand how the nationally regulated carbon market is going to develop“.
Russia is also very interested in entering the global market.

2. More companies reporting their GHG emissions to the Ministry of Economic Development

Five legal entities within the Nornickel group have already participated in two reporting sessions on GHG emissions organized by the Ministry:

  1. Nornickel;
  2. Kola MMC;
  3. NTEC;
  4. GRK Bystrinskoye;
  5. Norilsk Support Complex.

In 2025, this number will go up as the GHG emissions threshold has been lowered to 50 thousand tonnes of CO2 equivalent.

3. GHG absorption by waste rock in tailings ponds

One of Nornickel’s unique and flagship projects of forced mineralization is absorption of greenhouse gas emissions by waste rock in tailings ponds. A tailings pond is a specialized storage facility that contains waste materials, known as tailings, produced during mining operations.

The company has obtained a certificate from an international verification agency validating that the developed Methodology for calculating direct GHG emission absorption within waste rock in tailings ponds complies with GOST R ISO 14064-1-2021 “Greenhouse gases. Part 1. Requirements and guidance on quantifying and reporting greenhouse gas emissions and removals at organizational level”.

This Methodology sets the requirements for calculating direct GHG removal through passive (unmanned) tailings carbonization. These are specific minerals of waste rock found in the company’s tailings ponds. The mineralization of waste rock in tailings is a natural process, but one which can be activated to occur much faster.

The next step in the project is to study activated waste rock mineralization in tailings ponds. To increase the absorption potential, special chemicals and equipment are used.
OLGA IONTSEVA:

“After successful completion, this unique project of activated waste rock mineralization in tailings ponds can be registered as climate action, allowing the company to issue carbon units”.
Alikhan Avarsky, Head of Climate Change Adaptation in Nornickel, speaks about climate risk management trends.

4. Tougher requirements for public reporting on climate‑related disclosure

In June 2023, the new IFRS S1 and IFRS S2 were issued, imposing tougher requirements for sustainability disclosures: the information now has to be more detailed but, most importantly, published simultaneously with the company’s main IFRS financial statements.

Going forwards, the timeframes for submitting non-financial reports may change. For example, today the companies report their climate-related actions and impacts within the sustainability or climate reporting in the middle of the year. Going forward, to comply with the new standards, companies will have to disclose their climate-related information in February along with the IFRS financial statements.
Nornickel published its first standalone report on climate actions and impacts in 2023.
The new framework makes the job for the company more complicated: information now has to be gathered, verified and reported in line with the standard, and supported by audits and other procedures on a tight schedule. To meet the deadlines, a high level of automation is a must-have.

It is not required to adopt all the new standards in 2025 as they are not mandatory in Russia and Nornickel is not required to do so by global market participants. But the adoption should not be shelved either.

More than 20 countries are already implementing the IFRS S1 and IFRS S2 practices, including China where authorities are improving their climate-related disclosures based on the IFRS. The geographical coverage of new standards will expand, and that is why it is important to keep track of the requirements in effect on Nornickel’s export markets.

Alikhan Avarsky believes it is imperative to raise the climate-related reporting bar to meet the new IFRS regulations. This will allow the company to mitigate risks if relevant disclosures become required in the overseas markets where Nornickel has a presence, in the medium term.

5. More solid climate risk management practices

Climate change implications are long-term, but it is essential to understand the nature of upcoming change and incorporate climate-related impacts in risk management.

In 2022, in cooperation with the Russian Academy of Sciences, Nornickel made projections on climate changes in the regions where it hasa presence:

  • Norilsk Industrial District;
  • Kola Peninsula of Murmansk Region;
  • Trans-Baikal Territory.

Certain factors have been forecast to intensify compared to prior periods. This is the case not only for average annual temperatures and thaw depth in the Arctic zone, but also thunderstorm activity, frequency and intensity of abnormal precipitation, etc.

As for risks, each of them has a specific set of factors which control their occurrence. For example, in 2023, Nornickel evaluated the portfolio of technology and production risks revealing that climate risk factors are attributable to 16% of them. Since there was no unified instruction on how to record the climate risk factors, each business unit described the factors as they say fit. As a result, a risk factor could be deemed climate-related by one business unit but omitted by another.

At the end of the day, the business has no single vision or answers to the questions ‘How the climate and climate change impact the company’s operations?’ and ‘How should risk management account for these impacts?’
To answer the above questions, in 2024, the technique to assess the impact of climate factors on power lines, gas pipelines and fuel storage tanks has been trialed using a limited sample of risks inherent in the Energy Division. Targets have been selected in a way that enables assessment of various climate impacts.

In 2025, all business units of the company will undergo such assessment. The task of risk management today is to start speaking the same language when it comes to climate risk factors and rely on objective data collected in the company. Once vulnerability assessment of facilities is completed, we can move on from the current operational risks to identifying the long-term risks for all sites.

This way, we will not only solve our internal tasks, but utilize the results of this work in public disclosures and responses to Russian regulatory agencies. For example, Russia is now developing the national methodological framework for assessing climate risks and Nornickel’s experience can be helpful in updating the methodologies recommended for use.

6. Improved monitoring

The objective of climate change assessment is associated with another complication: lack of accurate statistics on weather conditions and related phenomena. Over a several-year horizon, such statistics could help assess the climate change risk. For example, in 2021, Nornickel founded a center to monitor foundations of buildings and structures constructed on frozen ground and resumed consistent permafrost monitoring.

To get a complete picture, such phenomena as abnormal precipitation and temperatures, thunderstorms, power line breaks and outages, equipment downtime must be recorded. There was no such task before, so year-on-year correlations were hard to create.

Once we’ve seen our grey zone, we decided to improve our statistics and consolidate data to be able to evaluate dynamics after several years. From 2024, our climate change adaptation team has organized collection and streamlining of the corresponding information. As we enhance monitoring, we will eventually trace the dynamics to rely on statistical input in decision making.

7. Incorporate climate change in construction standards

It is appropriate to think about revising the infrastructure design approach in the North to account for forecast change throughout the entire lifecycle of the facility.

Today’s climate forecasts do not allow for consideration of changes in the design. Not all the forecasts are reliable enough. For instance, the existing models fail to accurately forecast the wind load.

The on-site use of climate statistics and assessment of climate impacts in risk management could be of help. For example, where potential for soil expansion and thermokarst thawing underneath gas pipeline supports is a definite fact, such conditions will cause more wear and higher maintenance costs. Consequently, it would make sense to think of embedding structural design solutions in rebuild and construction.

The same is relevant for power lines. Under the standards applicable to the Norilsk Industrial District, an overhead ground wire was not required. The data collected confirm intensification of thunderstorms and greater number of power outages caused by lightening strikes which means that overhead ground wires must be included in designs.
ALIKHAN AVARSKY:

“Ideally, our goal must be to account for forecast future changes in the design.

It is time and resource consuming to amend construction standards, but in some cases it is not needed. For example, we can incorporate a foundation monitoring system in the design of a facility built on permafrost soil. Other areas of changes are associated with structural elements of foundations, but such changes require major effort to enable their utilization in design.“
Photos by Nornickel

January, 2025
2025-02-06 12:13 Governance Russia Trends