Russia delays wood export duty hike, Finland promises to issue permission for pipeline
Prime Minister Vladimir Putin said Sunday that Russia will further delay the introduction of a higher export duty on raw timber that has deeply worried neighboring Finland, while the Finnish premier promised to soon give the go-ahead to Russia's Nord Stream natural gas pipeline.
Putin told an international meeting of forest producers in St.Petersburg that Russia will maintain the duty freeze because of a slump in demand amid the international economic crisis. He said it would remain unchanged for 2010 and that may be extended into 2011.
Finnish Prime Minister Matti Vanhanen urged Russia to cancel the duty hike altogether, but he welcomed Putin's decision to delay its introduction.
"We are satisfied with the decision to freeze the raw timber duty for two years," he told reporters after his talks with Putin.
Vanhanen said that Finland would likely issue permission for the construction of Russia's Nord Stream natural gas pipeline in its territoral waters following an environmental check. "We hope it will be done before the year's end," he said.
The pipeline is to be built under the Baltic Sea to carry 1.9 trillion cubic feet (55 billion cubic meters) of gas each year from the Russian port of Vyborg to the German port of Greifswald if it receives approval from several countries surrounding the Baltic, including Finland.
Denmark on Tuesday became the first country to approve the pipeline's construction.
Putin thanked Denmark for its decision and said that Moscow expects a quick approval by Finland.
Construction of the 750-mile (1,200-kilometer) pipeline is due to start in 2010, but some countries bordering the Baltic Sea worry that the pipeline would pose a major risk to the environment.
Russia's state-controlled OAO Gazprom natural gas giant currently holds 51 percent of the project, while German energy companies E.ON Ruhrgas AG and Wintershall AG each hold 20 percent. Dutch company Nederlandse Gasunie NV holds the remaining 9 percent.
Putin's decision on raw timber export duty appeared to encourage Finland to back the Nord Stream project.
Russia is the world's largest raw timber producer while Finland imports 80 percent of logs from Russia. In the past 15 years, Russia has earned some euro7 billion from its timber exports to Finland, according to the Lesprom timber network.
Russia's government announced in 2006 that the export duty on raw timber would be increased more than threefold to euro50 per cubic meter in 2008. The move was supposed to spur exports of processed timber with higher added value and lead the country away from exporting cheap rough wood.
Putin said Russia remains committed to the introduction of higher duty on raw timber when market conditions allow that, as part of the government efforts to diversify industrial production.
Putin told an international meeting of forest producers in St.Petersburg that Russia will maintain the duty freeze because of a slump in demand amid the international economic crisis. He said it would remain unchanged for 2010 and that may be extended into 2011.
Finnish Prime Minister Matti Vanhanen urged Russia to cancel the duty hike altogether, but he welcomed Putin's decision to delay its introduction.
"We are satisfied with the decision to freeze the raw timber duty for two years," he told reporters after his talks with Putin.
Vanhanen said that Finland would likely issue permission for the construction of Russia's Nord Stream natural gas pipeline in its territoral waters following an environmental check. "We hope it will be done before the year's end," he said.
The pipeline is to be built under the Baltic Sea to carry 1.9 trillion cubic feet (55 billion cubic meters) of gas each year from the Russian port of Vyborg to the German port of Greifswald if it receives approval from several countries surrounding the Baltic, including Finland.
Denmark on Tuesday became the first country to approve the pipeline's construction.
Putin thanked Denmark for its decision and said that Moscow expects a quick approval by Finland.
Construction of the 750-mile (1,200-kilometer) pipeline is due to start in 2010, but some countries bordering the Baltic Sea worry that the pipeline would pose a major risk to the environment.
Russia's state-controlled OAO Gazprom natural gas giant currently holds 51 percent of the project, while German energy companies E.ON Ruhrgas AG and Wintershall AG each hold 20 percent. Dutch company Nederlandse Gasunie NV holds the remaining 9 percent.
Putin's decision on raw timber export duty appeared to encourage Finland to back the Nord Stream project.
Russia is the world's largest raw timber producer while Finland imports 80 percent of logs from Russia. In the past 15 years, Russia has earned some euro7 billion from its timber exports to Finland, according to the Lesprom timber network.
Russia's government announced in 2006 that the export duty on raw timber would be increased more than threefold to euro50 per cubic meter in 2008. The move was supposed to spur exports of processed timber with higher added value and lead the country away from exporting cheap rough wood.
Putin said Russia remains committed to the introduction of higher duty on raw timber when market conditions allow that, as part of the government efforts to diversify industrial production.