Diamonds: Another Carbon-Based Commodity from Russia

The Russian Federation doesn't just export gas, oil, and coal—it also exports diamonds. Contrary to what one might think, this mineral isn't used exclusively in jewelry and watchmaking. While turbulence in the diamond industry may not necessarily make headlines, its restructuring could, incidentally, help reduce its carbon footprint. Here’s why.

Russia exports natural and synthetic diamonds

The Russian company Alrosa is the world’s leading producer and exporter of diamonds, supplying about a quarter of the global market. The Russian government owns 33% of the company, and the Republic of Yakutia owns 25%, where nearly all of the company’s diamonds are mined. In addition, Russia accounts for about 10% of the market for synthetic diamonds—these (real) diamonds produced in laboratories.

Diamonds aren't just for jewelry and watches

Only the most exceptional gemstones are used in jewelry and watchmaking. The vast majority of diamonds—both natural and synthetic—are used in industries such as construction, mining, and energy. Due to the physical and chemical properties of diamonds, some of them are also used in high-tech applications (sensors, optics, lasers, medical cutting tools, etc.), which is actually considered the most promising sector for synthetic diamonds, ahead of jewelry. ^[1]. Will these industries also be vulnerable to the reputational risks associated with Russian diamonds? If so, the “loss” of the world’s leading supplier of mined diamonds and a major supplier of lab-grown diamonds could lead to a reshaping of the market.

The Potential of Lab-Grown Diamonds to Reduce Risks and Greenhouse Gas Emissions

For about 70 years, the synthetic diamond industry—that is, the laboratory production of (real) diamonds—has been growing and improving. While it is not yet possible to grow a diamond the size of the most exceptional mined diamonds, such as the Cullinan (over 3,100 carats, or 621 grams), progress is accelerating, and prices are falling: from approximately $4,000 per carat for a synthetic diamond in 2008 to $400 in 2020 (1). Mastery of the synthesis process makes it possible, to a certain extent, to control the cut, shape, and even the physical properties (by adding specific chemical elements) of the diamonds produced.

When it comes to climate change, the typical carbon footprint of a lab-grown diamond depends overwhelmingly on the electricity used during the synthesis phase. This means that a laboratory using low-carbon electricity (such as that from Norway, Sweden, or France) can produce lab-grown diamonds with an average carbon footprint per finished carat that is 2 to 8 times lower than that of the average mined diamond, whereas the current carbon footprint of a lab-grown diamond is approximately three times higher than that of a mined diamond, given that production takes place primarily in countries with high-carbon electricity. Is this an opportunity to help reduce the carbon footprint of all sectors that use diamonds?