Salans’ corporate finance team has advised Noble Carbon on its acquisition of carbon emission reduction units (ERUs) generated by the project on “Reconstruction of Steelmaking at JSC Ashinskiy Metallurgical Works, Asha, Russian Federation.” This was one of the first carbon credit transactions to date in Russia and among the most complex.
Salans’ team, led by Irina Dementieva, Of Counsel in Salans’ St. Petersburg office, and supported by Glenn Kolleeny, Partner and member of Salans’ Global Board, advised Noble Carbon on the legal regulation of carbon credit trading in Russia and the preparation of all legal documentation. Irina also assisted the client in negotiations with Russian State savings bank Sberbank, which is authorised by the Russian government to implement Article 6 of the Kyoto Protocol as the administrator of ERUs in Russia. In this specific transaction, Sberbank also represented the seller of the ERUs.
The practice of documenting carbon credit trading in Russia is still at an early stage. The Salans team worked with Noble Carbon to devise an innovative tripartite agreement regulating the rights and obligations not only of the seller and the purchaser, but also of the administrator of the Russian carbon credits register (Sberbank), which plays the key role in the transfer of ERUs.
The carbon units transaction agreement was executed in April 2011. The first operation under the carbon units transaction agreement was successfully carried out in May 2011.
Glenn Kolleeny said, “Salans is very excited to have acted as legal advisors to the Noble Group on this landmark transaction. In our view this transaction establishes the state of the art for documentation of carbon credits trading in Russia. We believe carbon trading is increasingly important for Russia as a country that can and must greatly increase energy efficiency. We are glad to be able to play a significant role on the legal side in the development of this market and the implementation of the Kyoto Protocol.”
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