ANNOUNCEMENT 28 Feb 2019

On 28 February 2019, the Russian Government announced the blueprint for new support measures to the petrochemical companies.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 1 neutral
  • 0 liberalising

SOURCE

Government of the Russian Federation. 2019. Decree 348-r dated 28.02.2019 approving the ПЛАН МЕРОПРИЯТИЙ ("ДОРОЖНАЯ КАРТА") по развитию нефтегазохимического комплекса в Российской Федерации на период до 2025 года (Roadmap for the development of petrochemical complex in the Russian Federation for the period up to 2025), http://government.ru/docs/36015/

Inception date: No inception date

Instrument unclear

On February 28, 2019, the Russian Government approved the Roadmap for the development of the petrochemical complex until 2025. The document is tied to the “national project” on International Cooperation and Export that envisions doubling of chemical industry exports from USD 17.4 billion to 37 billion by 2025.

The Roadmap includes 16 tax, customs, financial and infrastructural measures. More specifically, the following support measures are envisioned:

  • stabilization of tax and customs regulations for 15 years for large investments into petrochemicals
  • reduction in the excise tax for domestic isolation and processing of ethane
  • increase in the export tax on LNG and introduction of the “negative excise tax” for domestic processing of LNG
  • R&D superdeductions
  • interest payment subsidies to companies selecting Russian engineering, procurement and construction contractors and committing to procurement localisation
  • maintenance (or increase-sic) of import tariffs on processed petrochemical products in the free trade agreements currently negotiated between the Eurasian Economic Union and Singapore, India and Egypt
  • public investments into port-bound railways and logistical infrastructure for the petrochemical complex.

The Roadmap should lead to the doubling of the production of large-capacity polymers and a large increase in their net exports, as well as to a significant increase in the volumes of LNG and ethane processed domestically.

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