Scenario Analysis of the Prospects for the Use of Alternative Fuels for Road Transport in Russia

Abstract

The article examines the economic and environmental consequences for the Russian Federation that may be caused by the transition of road transport to natural gas fuel and electricity. According to strategic planning documents, public authorities are pursuing the policy aimed at converting a significant share of road transport to natural gas fuel. As singled out, this policy is mainly motivated by the issues of limiting emissions of harmful substances into the atmosphere from the combustion of oil products. In addition to a positive impact on the environment, this transformation should have a positive impact on the economy, since the use of alternative energy sources reduces transport costs, and construction of the necessary related infrastructure will create additional growth points for the economy.The objective of the study described in the article is to investigate the economic and environmental effects for the Russian Federation from the transfer of road transport to natural gas fuel.Main economic indicators analysed comprise subsidies that are necessary to create conditions for development of the relevant market, changes in budget revenues from the mineral extraction tax and excise duty on oil products, as well as additional gross value added due to multiplier effects in the economy. The study of environmental effects consists in assessing the reduction of emissions of greenhouse gases and particulate matter into the atmosphere.The analysis of the effects for the Russian economy from the transfer of road transport to alternative energy sources has shown that due to the multiplier effect, for the period up to 2035, gross value added will increase by 3,6 trillion rubles, and investments in the necessary infrastructure will amount to about 2,7 trillion rubles, which is about 13 % of the projected investment in the road sector. Due to the use of gas motor fuel and electric vehicles, by 2035 СО2 (carbon dioxide) emissions will be reduced by 11 million tons annually, which represents only 0,5 % of nationwide emissions. This means that the transfer of road transport to alternative energy sources is not effective enough from the point of view of the existing motivation, and the motivation must be changed in favour of positive economic effects.