Russia's Putin approves tax breaks for ammonia, hydrogen production in Arctic

Russian President Vladimir Putin approved on Monday nullifying mineral extraction tax for natural gas used in the production of ammonia and hydrogen in the Arctic, according to amendments to the tax code published on government's web site.

The tax breaks relate to natural gas from the Gydan and Yamal peninsulas. Russia's largest producer of liquefied natural gas (LNG) Novatek planned to produce ammonia at its future Obsky project there.

The law also reduces the rate of profit tax for projects built in the Arctic regions after Jan. 1 2025, according to the legal information web site.


Hydrogen is mainly used in oil refining and ammonia is used for fertiliser and industrial materials, but both are considered to have potential to replace higher carbon fuels in future.

Russia accounted for about 10% of global ammonia production in 2020. (Reporting by Oksana Kobzeva and Vladimir Soldatkin; editing by Philippa Fletcher)