Russia Plans Export Cargo Fee to Fund Arctic Icebreaker Construction

Russia is proposing a new fee on export cargo to finance the construction of icebreakers for its Arctic sea route, according to a draft government decree drawn up by the Transport Ministry and published this week.

The plan would raise more than 200 billion roubles, or about $2.35 billion, over the next decade. The money would fund the fifth and sixth vessels in Russia's Project 22220 icebreaker series, named the Leningrad and the Stalingrad, without drawing on budget funds.

Under the proposal, a shipbuilding fee of 20.07 roubles, roughly $0.2363, per metric ton of cargo would be payable by 27 Russian companies that operate Russian-flagged vessels and use them to export cargo through Russian ports.

The measure is intended to ease pressure on state finances as Russia contends with a budget deficit and rising war costs. The draft document warns that without the new vessels, cargo volumes on the Northern Sea Route could fall, including shipments from oil and gas projects run by producers Novatek and Rosneft.

It also estimates that if the fee were not imposed, the cost to clients of using Russian icebreakers would reach 52 million roubles, about $612,124, per day — more than nine times what the document considers a reasonable level.

The Northern Sea Route, navigable in summer and autumn, links Russia's western ports to Asia via the Arctic and can cut shipping times by up to 10 days compared with the Suez Canal. President Vladimir Putin has backed the project and said cargo turnover via the route will double to 70 million metric tons annually by the end of this decade.

The exchange rate cited in the draft is 84.9500 roubles to the dollar.