Meeting of the Presidium of the Council for Economic Modernisation and Innovative Development.
Dmitry Medvedev’s opening remarks
Remarks by Minister of Industry and Trade Denis Manturov
Remarks by Rotec CEO Mikhail Lifshitz
Remarks by Altenergo CEO Viktor Filatov
Remarks by Energolesprom CEO Andrei Grachyov
Dmitry Medvedev’s closing remarks
Opening remarks at the meeting of the Presidium of the Council for Economic Modernisation and Innovative Development
Dmitry Medvedev: Good afternoon, today we have a meeting of the Presidium of the Council for Economic Modernisation and Innovative Development. We will speak about innovative technology using renewable energy sources. This is a vast and promising topic, but not an easy one for this country.
The matter deals not only with electricity generation, but also the production of different substances actively used in medicine, animal health, agriculture, the light and food industries, construction and the reclamation of polluted territories – a major issue for this country. Such substances may be produced from all kinds of household and agricultural waste.
This is considered one of the most promising areas of technological development in the world. The market is taking shape before our eyes; its new segments are rapidly growing. This is particularly obvious during visits to states that have placed wagers on this area – so-called rapidly developing economies. We are also in this category but this market is not progressing quickly in Russia and we’ll talk about this today.
Nevertheless, sustainable development, green production and eco-responsible consumption have become a popular and economically sound theme. I will share with you my impression. Some five to seven years ago, it frequently evoked a skeptical reaction from the world’s politicians. They thought that this issue was just being raised to reassure environmentalists or to pay respect to modern R&D. Today it has become clear that this is a business and this is the main point because no branch will develop until commercial companies and entrepreneurs feel that it is possible to make money in that field. We should do this as well.
Russia has considerable resource potential – timber industry waste and agriculture (it does not have second-generation production). We must focus on developing high-tech green production lines to process biological raw materials, using our scientific and educational potential.
Let me repeat that, distinct from our BRICS partners, primarily Brazil, India, and partly China, we are not in the lead in this field.
According to expert estimates, the world biotechnology market may reach about $2 trillion– a huge sum – by 2025.
Dmitry Medvedev: "This year’s budget provides for subsidies to enterprises in the timber and chemical industries that are implementing investment projects with the use of industrial biotechnology. These subsidies amount to 500 million roubles. R&D on generating equipment using renewable sources is funded under the sub-programme on power engineering."
Obviously, it is important for the Government to pay attention to this subject. We plan to bring production involving biotechnology to 1% of the GDP.
This year’s budget provides for subsidies to enterprises in the timber and chemical industries that are implementing investment projects with the use of industrial biotechnology. These subsidies amount to 500 million roubles. R&D on generating equipment using renewable sources is funded under the sub-programme on power engineering.
Meeting of the Presidium of the Council for Economic Modernisation and Innovative Development
Today, we went to a biogas station. It is currently operating normally. This is the first experience for us, but it is really an efficient form of agricultural waste management and a source of energy that might be used in various areas (considering that our agriculture is making fairly rapid progress).
The Government has drafted regulations in this regard but they must be upgraded. I’m referring to the sale of electricity on the wholesale energy market. This electricity will be generated by renewable energy sources, such as solar and wind, and by mini power stations. Experts are about to complete the elaboration of regulations on the retail and wholesale markets. This work should be completed and I’d like to draw the attention of my colleagues in the Government to this issue.
It is very important to create mechanisms for launching biotech projects based on pilot projects. Our development institutes are working on this. It is enough to mention venture companies, the Foundation for Assistance to Small Innovative Enterprises in Science and Technology, Rosnano and the Skolkovo Foundation. It is necessary to establish a special holding on bio-tech industry. We have established three technological platforms in this area – Biotech-2030, Bio-Power Engineering and Medicine of the Future. I’m glad to say that the regions are also launching such projects (but probably not so many of them as we’d like them to). I hope that the most successful regional projects will be presented in brief at this meeting to the members of the Presidium.
Dmitry Medvedev: "It is very important to create mechanisms for launching biotech projects based on pilot projects. Our development institutes are working on this. It is enough to mention venture companies, the Foundation for Assistance to Small Innovative Enterprises in Science and Technology, Rosnano and the Skolkovo Foundation."
Such projects are fraught with risks and this is the main topic of our discussion. We haven’t met just to tell each other how well green technology works. This is not very sensible, especially considering that it is just making its first timid steps. The main point is to support research in this area and eventually help commercialise its results. It is essential to practice different forms of public-private partnership.
It is necessary to develop various forms of technical regulation and standardisation. We must also work on incentives to encourage gradual transition to green standards in production and consumption. Of course, we must develop the bio-tech industry.
A large package of instructions has been prepared. I’d like to ask you to express your opinion on this score – what is fine, what is missing and how we can promote this process.
That's all. Now we’ll hear from Minister of Industry and Trade Denis Manturov, who will report on innovative technology based on renewable resources. After that, anyone who wishes to speak will be able to, but I ask that you be brief and to the point. Mr Manturov, please.
Denis Manturov: Thank you. Mr Prime Minister, colleagues. The issue of renewable resources can be divided into two parts: renewable energy and renewable resources. When it comes to power generation, water is the most important renewable source of energy. Russia is the world’s fifth largest country in terms of hydropower generation, including its hydropower plants, which produce approximately 17% of the total amount of electricity in the country.
Dmitry Medvedev: But we have inherited them, haven’t we?
Denis Manturov: Yes, this is true. Other renewable resources such as wind, geothermal water, sun and biomass produce only 0.3% of total energy, which is 10 times less than the world’s average.
Denis Manturov: "The Renewable Energy Sources Development subprogramme, which is the responsibility of the Ministry of Energy, provides for increasing the share of alternative energy eightfold by 2020."
The Renewable Energy Sources Development subprogramme, which is the responsibility of the Ministry of Energy, provides for increasing the share of alternative energy eightfold by 2020. The Government has issued its recommendations for the development of these resources, and our colleagues have been working to implement them, and so I’d like to speak here about renewable resources based on biomass materials from farming, aquaculture and forestry.
The global market of renewable energy sources is estimated at approximately $70 billion, and it is continuing to grow. For example, the EU’s Renewable Energy Directive, which was adopted in 2009, encourages the production of energy from renewable resources. Many industrialised countries allocate substantial funds for fundamental research and design projects in this area. Russia has only started developing this sector, which is why its market only accounts for around $600 million per year.
The use of technology based on renewable resources is designed to increase resource efficiency, and resolve the problem of waste recycling and, of course, environmental problems. The development of this sector will promote the production of high added value products in the industries where innovation is not accepted eagerly, such as agriculture and forestry. The production of high added value products and the use of renewable resources are the priority issues in forestry. The traditional wood biomass products are fuel pellets and briquettes, with global production reaching 24 million tonnes per year. Russia produces only around 1 million tonnes of pellets and briquettes, of which 80% are exported.
We must increase the use of this type of fuel in the country to replace part of less environmentally friendly sources of energy, primarily fuel oil and coal. Some regions have launched this process. We need to develop the production of innovative high added value products such as nano pulp, bioalcohol and monosaccharides. We have started working in this area. In particular, we are creating a pilot enterprise for the hydrolysis of cellulose in Ryazan. But you can count such projects on the fingers of one hand.
We must encourage the use of low-quality timber and timber waste, of which only less than half is currently recycled, as sources for the production of high added value products and energy.
Agriculture is the largest provider of renewable energy resources in Russia and other countries. Russian enterprises only recycle 28% of agricultural waste, which is nearly three times less than in the EU countries.
Fodder protein is one of the most promising areas of the use of renewable agricultural resources. So far, the shortage of fodder protein in the Russian market is estimated at 10% of the demand.
Denis Manturov: "The global biopolymer market is estimated at $5 billion and is expected to grow by over 25% a year. We plan to produce artificial rubber from agricultural resources in Omsk, polymers and copolymers from milk acid (Renova Group), as well as biocomposites (Polycomplex) in Kaliningrad. In the long term, we will increase the production of chemical products using biotechnologies. These products currently account for 5% worldwide, but the figure is expected to increase to 30% by 2030."
Biopolymers are another innovative product. The global biopolymer market is estimated at $5 billion and is expected to grow by over 25% a year. We plan to produce artificial rubber from agricultural resources in Omsk, polymers and copolymers from milk acid (Renova Group), as well as biocomposites (Polycomplex) in Kaliningrad.
In the long term, we will increase the production of chemical products using biotechnologies. These products currently account for 5% worldwide, but the figure is expected to increase to 30% by 2030.
Aquaculture is one of the least developed sectors of renewable resources. The global aquaculture industry, which is estimated at $14 billion, is dominated by China, which accounts for 61%.
Denis Manturov: "The production of the carrying base for bioadditives, components for the food industry and aquaculture fodder, seems to have the brightest future in Russia."
The production of the carrying base for bioadditives, components for the food industry and aquaculture fodder, seems to have the brightest future in Russia. A good example of innovative projects in this sphere is the aqua-bioparks that are being created by the Far Eastern Federal University and the Institute of Marine Biology of the Academy of Sciences’ Far Eastern branch. Scientists are analysing the possibility of using aquacultures for the production of third-generation biofuels and components for the chemical industry. But this project is still a long way from practical implementation.
The development of products from renewable resources can only be launched if different agencies take comprehensive joint decisions to support the creation of these new production capacities and to develop the markets for these products. To date, we have adopted or are discussing the approval of policy documents on the development of the renewable resource industry, more precisely the Programme for the Development of Biotechnology until 2020 and the Industrial Biotechnologies subprogramme, which we have drafted. As much as 1.5 billion roubles are to be allocated for it in the next three years.
Mr Medvedev, you have mentioned technological platforms for assisting new development. Investment projects based on the use of renewable resources have been launched in several regions. Other projects in addition to the projects I have mentioned include a plant to produce substrate in Berdsk, Novosibirsk Region, an enzyme agents plant in the Tambov Region, and nano pulp production in the Belgorod Region with a planned capacity of more than 650 tonnes per year. There are also several new biopolymer projects.
Denis Manturov: "We have taken the first steps in this area and can now increase the scale of operation and the number of enterprises that use renewable resources."
In other words, we have taken the first steps in this area and can now increase the scale of operation and the number of enterprises that use renewable resources. To further develop this industry, we should provide support for research and encourage the establishment of new production. We also need to develop technical regulations, a system of standards and a national code list, and take other regulatory measures.
Furthermore, we need to ensure a gradual transition to the obligatory recycling of waste, primarily in forestry. We have formulated our proposals and evaluations, which can be included in the minutes of this meeting. In conclusion, I propose adding the efficiency of using renewable resources, primarily renewable energy, to the list of key performance indicators (KPI) of the regional leaders. Thank you.
Dmitry Medvedev: Thank you. Now that the brief presentation is over, let’s discuss development incentives for this sector. Colleagues, please speak your mind.
Mikhail Kirpichnikov (Head of the Biological Engineering Department at Moscow State University’s Faculty of Biology and Co-Chairman of the non-profit partnership Biotech-2030 Technological Platform): Thank you, Mr Medvedev. My name is Mikhail Kirpichnikov, and I’m a member of the Russian Academy of Sciences and represent Biotech-2030.
I will pick up where Mr Manturov left off. To my mind, legislative support for the development of the sector and technical regulation are the key aspects. I believe that representatives of the business community will say what they need in order to create the required market. I would only like to focus on technological aspects, primarily cutting-edge technologies, rather than all the bioengineering technologies, such as those for processing renewable feedstock.
The scaling up of modern technologies and the creation of pilot units is key here. The first slide shows this unit. This is Ryazan, which was mentioned by Mr Manturov. I would like to stress that this does not mean that we should not convert substandard renewable feedstock into pellets, briquettes, etc. These products have their own markets that emerged long ago. But I am talking about state-of-the-art technologies.
What does a modern bioengineering production facility look like (“by refinery,” as they now say)? You can see feedstock sources, such as agricultural produce, timber and aquatic cultures, in the left section of the slide. The central section shows the so-called “by refinery” process which creates semi-finished products through the fermentative refining of bioengineering processes. We can use these semi-finished products to produce anything, from biofuels to special-purpose chemicals. By the way, low-yield chemistry creates a particularly valuable product. To date, the country annually needs only a few thousand tonnes of this product. At the same time (see the green arrow on the right), the added value, naturally, soars from the bottom line, from biofuel to low-yield chemistry. And, naturally, the tonnage declines, as is shown by the red arrow.
I would like to note the following specifics of the bioengineering production process: As compared to oil refineries, the anthropogenic impact is reduced considerably. This is obvious, it’s beside the point. But the special flexibility, as you can see … This implies flexibility in terms of feedstock (the “by refinery” process can use an extremely wide range of feedstock products with almost no investment) and in terms of the end products range. On the right, you can see the products that can be created at virtually the same facilities and without substantial investment.
The pilot project linking the test-tube (where scientists work) with the plant (right) is a key feature. This feature is part of all innovative technologies. The term “Death Valley” has even been coined. This sector with a bioengineering pilot project is a sector that the state considers to be part of private business. And private business believes that the risks are too high, and it refuses to work in this sector.
What does this pilot project yield? First of all, new national technologies are becoming more popular, and the risks to investors are minimised. The creation of new industrial technologies is impossible without industrial audits, without checks and the need to scale up. This is what the pilot project is called on to accomplish.
Ten days ago, this Ryazan-based facility received a delegation of German industrialists and bioengineers. They were extremely interested in this unit, and Germany itself has about three of these units.
Mikhail Kirpichnikov: "In Belgorod Region a wonderful production facility is currently being established. This is the most advanced facility for producing irreplaceable amino acids in Shebekino (unfortunately, we were now unable to see it). This production facility will provide almost 50% of irreplaceable amino acids for the Russian agro-industrial sector, including the poultry and livestock industries."
Speaking about our Belgorod Region once again, I would like to note that, owing to the stance of the regional administration and the business community, a wonderful production facility is currently being established here. This is the most advanced facility for producing irreplaceable amino acids in Shebekino (unfortunately, we were now unable to see it). This production facility will provide almost 50% of irreplaceable amino acids for the Russian agro-industrial sector, including the poultry and livestock industries. As I see it, what we need is a pilot unit here because a specific technology has to be selected.
In our opinion, this pilot unit is the central element of a well-distributed bioengineering centre. Science, education, market demand, assistance from the federal targeted investment programme, loan agencies and development institutions are the key “ingredients” making it possible to train personnel, to harness new ready-made technologies and to ensure cost-effective transfers of advanced foreign technologies. This slide shows the results of this well-distributed bioengineering centre’s work. This includes initial data for designing an industrial enterprise and a feasibility study of any specific technology. Reduction of risks for private and state investors and the effective transfers of advanced foreign technologies are impossible without pilot projects. As a comprehensive system, this is the only project in Russia, accomplished under a state contract with the Ministry of Science and Education and approved in 2013. We would be unable to move forwards without pilot projects.
What do we propose? In effect, we propose four currently available provisions, and you can read them in the draft decision. I will not read them out because they deal with the issues that I have already discussed. This includes efforts to strengthen the Industrial Bioengineering Technologies sub-programme of the Ministry of Industry and Trade, the creation of a specialised technical committee, support for proposals of the Biotech-2030 and Bio-Energy programmes regarding the use of technologies for processing renewable feedstock, and a specific provision stipulating support for pilot industrial units. Thank you.
Dmitry Medvedev: Thank you. Let’s return to these proposals when we finalise the draft resolution that will be signed today.
What kind of technical committee are you proposing to create?
Mikhail Kirpichnikov: A technical committee under the Federal Agency for Technical Regulation and Metrology. Preliminary arrangements have already been made with the Agency and the Agency and the Ministry of Industry and Trade will probably state their position on this issue.
Denis Manturov: It will be taken care of.
Dmitry Medvedev: All right. Does anybody else want to speak? Go ahead please.
Mikhail Lifshits (General Director, ROTEC): Thank you. Mr Medvedev, colleagues. I’m Mikhail Lifshits of the Renova Group. I will try to skip the technological issues, as Mr Kirpichnikov has already addressed them and they can only be supported. We are talking about building a plant in Russia that will produce bioplastics from lactic acid. Therefore, the first step should be the production of lactic acid.
This slide demonstrates quite well, in my opinion, the current situation in the market. The existing production centres are shown in green and the large circles show the expert forecasts for biopolymers consumption until 2020. Currently, there are three global consumption centres and two production centres. As of 2008, there were four major players in Europe moving in this direction, but they were hit by the crisis, and as a result, the field has remained empty. And it is filling this field that we are discussing today.
The project is well thought out. What’s important is that we have the full support of our colleagues in the agriculture sector. Mr Mirgalimov is present here (Razgulay Group). We also have the support of the scientific community – Mr Kirpichnikov and Mr Beburov (Mikhail Beburov, Director, Research Institute for Genetics and Selection of Industrial Microorganisms). In other words, everything… We have tried, but failed to find any weaknesses in this project.
We have a pilot polymerization plant in Switzerland that works on our own technology, called Sulzer. The enzymes are produced in Ryazan with the help of Rostec Corporation. Here, too, our cooperation level is very high. Therefore, the project is very well thought out and almost ready for implementation. The sites have been identified.
Just a few words on the fields of application. Packaging is obvious, but there are other important spheres, including textile, woven and nonwoven fibre, cotton replacement, the chemical technology that helps produce natural products from renewable raw materials.
Now on to positive and negative factors. The next slide demonstrates what other countries do to help implement this kind of projects. To summarise, they encourage retailers to use only biodegradable products for disposable packaging and utensils. To say encourage is to put it mildly. And secondly, the definition of biodegradation is clearly specified in the law.
Dmitry Medvedev: And how are you going to encourage them? Will it be blackmail or murder threats, as they say?
Mikhail Lifshits: In different countries they use different incentives, ranging from recycling fees, which we are also considering, to outright bans. For instance, in Italy using non-biodegradable packaging is prohibited.
Dmitry Medvedev: Do they fine them for that?
Mikhail Lifshits: Yes, retailers are fined for…
Dmitry Medvedev: What does biodegradation mean?
Mikhail Lifshitz :"Biodegradation means that as a result of compounding we get biomass as opposed to garbage. There is a technology that we use to add compounds to conventional oil-derived plastics, as a result of which they decompose into some poisonous stuff. Alternatively, when it decomposes into biomass, it is called biodegradation. A key aspect of the story is that in Europe biodegradation is not a selling point, as waste recycling is well developed there. The selling point is that it is clean, hypoallergenic, has no harmful effects on health."
Mikhail Lifshits: Biodegradation means that as a result of compounding we get biomass as opposed to garbage. There is a technology that we use to add compounds to conventional oil-derived plastics, as a result of which they decompose into some poisonous stuff. Alternatively, when it decomposes into biomass, it is called biodegradation. A key aspect of the story is that in Europe biodegradation is not a selling point, as waste recycling is well developed there. The selling point is that it is clean, hypoallergenic, has no harmful effects on health, and the list goes on, especially when it comes to synthetic fibres, including pads, diapers, and materials that touch the body.
Getting back to what needs to be done. We need to clearly define biodegradation in the law and the standards. With the understanding that biodegradable plastics will make up about 10% of traditional plastics, we need to take measures to limit the use of traditional plastics in everything that relates to food and disposables.
As for the project’s economic dimension, its competitiveness will be determined by interest rates. The project cost includes the cost of energy, raw materials, and money. We work quite closely with the Ministry of Industry and Trade and I believe we have its full support. The project is moving ahead. The following factors could accelerate it and contribute to its implementation: appropriate laws, interest rate compensation, if we take loans here, and to produce in Russia our own enzymes and strains (which are also key technology elements that we are missing) we need some research and development financing. The centrepiece of our efforts is the Rostec project in Ryazan.
Dmitry Medvedev: What market share do you think the biodegradable plastics will have in Russia?
Mikhail Lifshits: According to forecasts (I should have an estimated figure here), about 3.5-4 million tonnes of plastics will be produced in Russia by 2020. If we are talking about 10% then about 400,000 tonnes will be produced in Russia.
Dmitry Medvedev: The chart says 200,000.
Mikhail Lifshits: Our numbers are based on pessimistic scenarios. We calculate the production in Russia and Europe together. Seven hundred thousand is in Europe, which is currently empty.
Dmitry Medvedev: If we take 200,000, it makes about $4 billion, correct?
Mikhail Lifshits: That’s right.
Dmitry Medvedev: All right. Thank you.
Mikhail Lifshits: What I mean is that the project is focused on Europe. In Europe, there are no players today and it will be the only one. If we do this, it will be an export-oriented, healthy project, and we are working with key players downstream.
Dmitry Medvedev: Thank you.
Please tell us about this station.
Viktor Filatov (Altenergo CEO): To begin with, I’d like to thank you for your kind words about the projects that we have completed. We did our best to fulfil your instructions, and I’m glad that we did it well. However, we encountered a few problems on the way, which we resolved with the assistance of the Energy Ministry. I had to ask Mr Dvorkovich two or even three times to help to lift administrative barriers. Some documents have been approved, in particular on simplifying the procedure, at the Market Council meeting, and the rest are pending consideration.
What did we have to deal with when implementing the project? The first thing, as you will see from the proposals I will put forth, is that we need to decide where this industry belongs and who will monitor its development. This sector has not properly developed in Russia yet, we don’t have a national code list, and so the Agriculture Ministry…
Dmitry Medvedev: Sorry, what do you personally think about this? You are the trailblazers, our best and our only full-blown company that has been working in this sphere.
Viktor Filatov: I wouldn’t be so sure about that. Our focus is on the environment, without a doubt, but this will be a bio-energy agricultural cluster. I will speak later about our opinion of this project and its positive and negative sides.
To begin with, we see that there is a huge source of raw materials, where waste can be transformed not only into energy but also heat and organic fertilisers. We had a working group dealing with this issue, and the governor has signed a regional Bioenergy from Waste programme. What can I say? We see that available waste can be used to produce over 200 MW of electricity, or approximately 1.7 billion kWh of energy. We understand that it would be unwise to waste the heat that is produced in the process. There are several ways of utilising it, for example to generate electricity. But we have proposed a better option: to build hothouses. We have enough heat for 150 to 160 hectares of hothouses where some 100,000 tonnes of products can be grown a year, which will earn us another 5 billion roubles.
The third option has already been mentioned here: organic fertilisers. Our region currently imports 3 billion roubles’ worth of mineral fertilisers, or 220,000 tonnes of NPK [Nitrogen (N), Phosphorous (P) and Potassium (K)] content. Two-thirds of nearly all of these mineral fertilisers can be produced in the region. We can turn out 2 billion roubles’ worth of products, boosting our gross domestic product to approximately 15 billion, resolving environmental problems in the process and creating at least 10,000 high-tech, high performance jobs.
What do we need to achieve this goal?
We have estimated the necessary funding at 60 billion roubles, which our financial institutions are ready to provide. We have coordinated the issue with Sberbank, which is ready to give us a loan on certain conditions. The project is encountering problems, because we need something as a pledge to receive loans, but our medium-scale enterprises have nothing they can pledge. Therefore, we need guarantees, including state guarantees, that we will repay the loans. Ideally, the payback period should be increased from five or seven years to 10 years, and we also need some practical assistance.
What kind of assistance do we need? During the first few years, the investment stage, we need to repay the principal amount of the loan and also interest. So, co-financing our expenses at the investment stage could be one way to help us. We have made preliminary calculations where costs are calculated per kilowatt of rated capacity, per tonne of recycled waste, or any other indicative element, or based on traditional elements used for our agricultural enterprises. The region has poultry and pork facilities, which are important for the regional economy and which received subsidies and government support during the investment stage.
After the investment phase, our share of the retail electricity market will reach approximately 10% of total consumption, but our electricity will cost half of what it costs now. Of course, we will need to use power grids, but on the whole, this is a very interesting project, which we have thoroughly analysed and are ready to implement, with your approval, as a pilot cluster in the Belgorod Region. We are ready to share our experience with companies in other Russian regions.
I’d like to point out what we need to accomplish this project. We need favourable loan terms – I believe that a package of measures will be approved sometime in February, ideally, by the end of the Olympic Winter Games.
We have seven contracts that have been gathering dust since last year. We could have launched a biogas plant with the capacity of 15 MW last year, but we didn’t for lack of a legal framework. I wholeheartedly agree with Mr Kirpichnikov that we cannot proceed without the R&D and practical projects which we have implemented. As you know, it’s better to see something once than to hear about it a thousand times. Last year, we took part in four tenders, hoping to win at least something for our development. For example, one of the projects concerns purification technology for biogas, which can be used for public transport or supplied to the grid. Other projects deal with the separation and dehydration of organic fertilisers, which is a completely different market that can rival the market of mineral fertilisers.
We must definitely move ahead. Take household waste: We have studied international experience and visited half the world. There are also Russian designs, for example by the Research Institute of Radiophysics at St Petersburg State University. An agreement has been signed, and relatively small financing – between 10 and 20 million roubles – would be enough to create a pilot installation and to show that it can be effective. There are also foreign designs, which can be analysed too, and a project on purification facilities and water treatment plants.
In short, we have a good understanding of the problem and see the direction in which we should move. We have a team and desire to work. What we need is support, and so I am asking for it. We have submitted our proposals for incorporation in the protocol via the concerned ministries and agencies.
Dmitry Medvedev: Thank you very much. But still, I don’t quite understand who would supervise your activities; all the more so as different interests intersect in this marginal area.
Viktor Filatov: We still report to the Ministry of Energy, and it should be the Ministry of Agriculture who should supervise our acrtivities. Waste processing and disposal, heat generation …
Dmitry Medvedev: I see. I wanted to specify this. You said the Ministry of Agriculture should also monitor this area. And what about these documents, including the new regulatory documents you mentioned?
Viktor Filatov: No, those documents are not new. They’re being drafted, and they have almost been approved.
Dmitry Medvedev: Yes, but they are new. Documents are considered new until they have been signed by the Prime Minister, only after that they become current documents. I simply wanted to tell you that my colleagues promised to finalise them over a ten-day period, and have them submitted to be signed. This is simply for your information.
Viktor Filatov: Thank you very much.
Dmitry Medvedev: All right, ladies and gentlemen, who wants to add something? Please.
Andrei Grachyov (Director General of the Energolesprom Company): Good afternoon, Mr Medvedev, ladies and gentlemen. I am Andrei Grachyov from the Energolesprom Company.
I would like to say a few words about our project. The company was founded by scientists from the Kazan National Technical University. We have created a production process that can convert sawdust, straw and any other ligno-cellulosic biomass into biofuel and bio-coal.
Just like the oil industry, this innovative approach makes it possible to collect and accumulate specific types of waste, to process this waste more effectively and to convert it into various traditional products, including packaging materials, fuel or other chemicals. At the same time, today’s infrastructure only needs to be slightly modified.
Actually, waste-collecting production companies, including flax-processing plants, agricultural companies, grain elevators and timber industry enterprises, can use these units for the most part. Every year, Russia accumulates about one billion tonnes of ligno-cellulosic waste. Currently, most of this waste remains unprocessed, either rotting away in landfills or in spoil heaps or pits. This production process makes it possible to recycle this waste, and our marketing survey shows that the country needs about 15,000 of these units. The end products of these units can be sold on existing markets. With regional support, we have conducted research using an experimental unit, and we have prepared a rough drawing of a demonstration unit with an annual capacity of 3,600 tonnes.
Andrei Grachyov: "With regional support, we have conducted research using an experimental unit, and we have prepared a rough drawing of a demonstration unit with an annual capacity of 3,600 tonnes."
Currently, we are searching for financial partners to help us implement this important pilot project. And in our opinion this sector faces a major problem. Basically major companies are not interested in this sector. So this is also our problem. Unfortunately, small companies processing initial feedstock have no resources for introducing new technologies, and they are not prepared to share the risks of the scale up operations.
As for legislative amendments, we would like to suggest that the definitions of existing fuel varieties, such as timber-and-fuel pellets, bio-diesel fuel, as well as the definitions of all fuel products and types, including those being obtained using thermochemical and chemical methods from renewable plant feedstock, be included in the draft federal law On the Development and Consumption of Biological Fuels. Thank you.
Dmitry Medvedev: Different approaches are being proposed. This is good. It would be worse if we didn’t have any proposals, or if we decided that everything was wonderful. This situation is far from wonderful. To be honest, we are lagging behind countries with considerably lower education standards in using innovative technologies that take advantage of renewable sources. Considerably lower! And, of course, this also includes the accumulated effect, our sluggishness and probably bureaucratic problems.
Naturally, the draft decision should be finalised taking into consideration our colleagues’ views. We must address this seriously. Who will be in charge? I agree that it is impossible to establish a new department responsible for every new project. There are quite a number of inter-departmental programmes that are addressed by one department.
As for this particular issue, I can tell you that I don’t really care who will be in charge. I don’t mind if it is the Ministry of Economic Development, the Ministry of Industry and Trade or the Ministry of Agriculture. But we need to decide who will take part in all our meetings and events. I believe that, owing to our decision-making process, this is impracticable. Therefore I would like to ask you to select the appropriate department. Again, I’m ready to support any workable solution, but the senior Government officials should make the final decisions. Mr Dvorkovich (Arkady Dvorkovich), considering the fact that you oversee this sector, you will address this issue.
As for the project, we have to get this work done. Mr Belousov (Andrei Belousov) gave an example of the lack of coordination among state agencies and some other organisations which impacted negatively on a profitable enterprise. If possible, let’s try to rectify this now.
Regarding the plan, I have my own thoughts as to how this should be done. You know, we will get nowhere if we start deleting specific clauses from a directive because all this is drowned in a torrent of words. Such is our way of life. I have nothing against drawing up a plan, but the plan should stipulate specific measures for supporting specific sectors, projects and ideas. All of the provisions should remain intact because otherwise all this will go down the drain. We sign a lot of documents. I would like to ask Government members, experts and our esteemed colleagues, including corporate representatives, to finalise this plan because this issue is important for the future of Russia. Thank you very much.
