New Greens: who, and most importantly, why, continues to develop environmental startups in Russia

According to Fortune Business Insights, the global Green Technology and Sustainability market is valued at $13.7 billion in 2022 and according to

forecast to reach $51 billion by 2029,maintaining an average annual growth rate of 20%.  Vantage Market Research estimates the size of this market at $10.9 billion in 2021 and $44.4 billion by 2028, with a CAGR of 26.4%. As the authors of the Vantage Market Research study write, the United States remains the largest GreenTech market, but at the same time, the Asia-Pacific region is leading in terms of growth rates and volumes of attracted investments. In terms of the level of integration of green technologies in industry, the leaders are China, India and Singapore. 

What GreenTech technologies are being developed by the largest companies in the country?

In the structure of the Russian economy, a large share is occupied by heavy industry and resource extraction, therefore, first of all, the introduction of green technologies is necessary in the industrial sector.

According to the ISSEK Center for Market ResearchHSE, large industrial companies show the greatest interest in green technologies in the field of energy efficiency and waste disposal - each of these areas was noted by 21% of the enterprises participating in the study. Moreover, waste disposal is the direction that is developing most actively. Back in 2019, only 12% of enterprises used eco-technologies in this area. The least common so far are the transition to renewable energy sources (it is implemented by only 2% of Russian companies) and the expansion of the electric transport fleet (4%).

At the same time, the demand for GreenTech inindustry is growing: 21% of the study participants said they are working to improve energy efficiency, and 16% plan to develop eco-technologies in waste management, increase the efficiency of water and raw materials use, and reduce material consumption.

In 2022, 11% of enterprises plannedintroduction of technologies aimed at developing measures to reduce greenhouse gas and pollutant emissions. Interest continues to grow in the further adoption of digital technologies to create clean and safe energy. 12% of enterprises are still focused on development in the field of expansion of the fleet of electric vehicles and 11% on the implementation of digital technologies for the transition to renewable energy sources, according to a study by the HSE.

Towards a clean planet through the exchange 

One of the important channels of financing GreenTechare specialized financial instruments. These are securities, so-called green bonds, in demand among investors who prioritize the environment as a priority. Such bonds assume that the funds raised with their help will be invested in projects that have green status, that is, corresponding to one of three areas: preventing climate change (reducing carbon emissions), preserving natural resources and biodiversity, reducing pollution. 

In August 2019, I earned money on the Moscow ExchangeThe sustainable development sector is the first full-fledged platform for supporting environmental projects. To obtain green status, paper must undergo a certification process and meet certain requirements. In the current conditions, a “gray zone” has been created here, since certification is carried out by foreign agencies, and there are no domestic assessment institutes yet. At the moment, issuers of green bonds are guided by the relevant provisions of the Bank of Russia. 

According to the analytical platform Infragreen, inIn 2021, 12 Russian issuers issued 13 green bond issues worth about RUB 212 billion. In total, in 2019-2021, there were 33 issues of green, social and other targeted bonds with a total volume of about 418 billion rubles. Among the largest issuers: Russian Railways, Sberbank, Rosatom, the Government of Moscow and the Sinara company. There are an order of magnitude fewer specialized investment funds. The total net asset value of responsible investment funds operating in Russia, including open-ended and exchange-traded funds, at the end of 2021 amounted to about RUB 16 billion. Among the largest players: VTB, Sberbank and Tinkoff Bank.

How to make the industry cleaner?

One of the largest investors in GreenTech in Russia is a large business - industrial companies that find specialized startups and actively implement their developments in their business.

Ecosystem of green technologies

One striking example here is a startup"BioMicroGels", GenerationS graduate. The company produces a product for treating wastewater from oils and petroleum products, as well as eliminating oil spills. It acts on the principle of a coagulant: it envelops contaminants with a thin film; the particles stick together in a jelly and are removed by filtration. Over the years, biomicrogel has repeatedly proven its effectiveness; in particular, this solution was used to clean up a diesel fuel spill in Norilsk at the Norilsk Nickel plant. In 2021, the company attracted 1 billion rubles of investment from Gregory Berenstein, the founder of the Zoom Capital fund. 

Startup EcoPlatform produces vending machines andactively working with large retailers. Vending machines are used for the automated collection of plastic bottles and aluminum cans for further processing. Prior to EcoPlatform, Russian retail used Chinese vending machines, but they constantly broke down, and there was no service in Russia. European vending machines were too expensive. At the same time, both of them printed paper checks for a discount. The startup's solution is integrated with store loyalty programs, and instead of discount coupons, customers receive bonuses from VkusVill, Perekrestok and others.

Another popular destination in Russia isrecyclable packaging and waste reduction. An example in this area is the startup Ecoprost from Yekaterinburg, which in 2014 began producing reusable shopping bags. Now the retail chains Auchan, Magnit, Azbuka Vkusa are cooperating with them. and others. Another startup in the field of environmentally friendly packaging, Geovita, is developing disposable biodegradable tableware and collaborating with companies such as Vkusville, Azbuka Vkusa and Russian Railways. And the Chelyabinsk company Megapolisresurs, which was initially involved in the recycling of microcircuits and electronics, began recycling batteries in 2012. Among the partners of Megapolisresurs is one of the world's largest manufacturers of batteries, Duracell.

In addition to battery collection points, various retail chains began to install containers for collecting lids from plastic dishes. Volunteer eco-project Charitable foundation "Volunteers to helporphans” “Kind Caps”, in addition to the goal of making the world cleaner, also sets charitable tasks. The proceeds from the collection of caps are used to purchase strollers, exercise equipment and wheelchairs for children with special needs. The recycled material from which the caps are made is an excellent raw material for the manufacture of new polymer products.

There was concern around the world that the greenthe agenda is relevant in a period of economic growth, and with the advent of major crises, it will be superseded by more pressing issues. However, the GreenTech industry has successfully weathered the crisis associated with the pandemic, and new projects continue to appear and receive funding, despite the difficult economic situation.

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