Rusal's Deripaska Says Renewable Energy Needs Carbon Tax Support

  • World needs a carbon tax of $12 to $15 a ton, he said
  • Rusal has reduced emissions by 54 percent since the mid-1990s

Oleg Deripaska, the billionaire president of aluminum producer United Co. Rusal, said the world should consider a carbon levy of $12 to $15 per ton to support renewable energy.

Renewable energy companies are “going to die in the next two years with such low prices and without subsidies," Deripaska said on a panel in Davos, Switzerland on Wednesday. The Paris conference on climate change had "great results" and showed that "a lot of customers understand what clean metal means."

Rusal has reduced emissions by 54 percent since the mid-1990s and will fully switch to hydro power for its electricity needs by 2020, Deripaska said in December. Companies such as Rusal, Norsk Hydro ASA and Rio Tinto Group emit around 5 to 6 tons of carbon for every ton of metal produced, compared with 25 tons or more for competitors in China, India or the Middle East, he said.

More than 180 nations gathered in Paris at end of 2015 to discuss a far-reaching agreement to reduce global carbon emissions. The emerging deal would require wealthy countries, including the U.S., to cut their own pollution while helping poorer countries shift from dependency on fossil fuels and mitigate the effects of climate change.

Deripaska also said to Rossiya 24 TV that commodities prices may never fully recover. The business models of companies involved in multiple commodities are not viable anymore, he said at the panel in Davos.

"All diversified companies now show the worst results to their shareholders,” he said. “The model should be a company focusing on its customer, delivering value-added products."

Rusal doesn’t see aluminum falling further from the current level, Deripaska said to Rossiya 24. Still, Rusal doesn’t expect prices to recovery quickly, he said later in interview to Bloomberg Television. China is devaluing its currency, which supports local producers, and it may take at least another year for them to start curbing output, he said.

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