You are on page 1of 1

Slide 1 India along with China, lead countries in earning Carbon Credit India and China are likely

to emerge as the biggest sellers and Europe is going to be the biggest buyers of carbon credits. India, China and some other Asian countries have the advantage because they are developing countries. Any company, factories or farm owner in a developing country can get linked to United Nations Framework Convention on Climate Change and know the 'standard' level of carbon emission allowed for its outfit or activity. The extent to which it is emitting less carbon (as per standard fixed by UNFCCC) it gets credited in a developing country. These credits are bought over by the companies of developed countries -- mostly Europeans. India and China have surplus credit to offer to countries that have a deficit. Slide 2 Indias Stance in Carbon Credits India is considered as the largest beneficiary of Carbon credit trade. India pocketed Rs 1,500 crores in the year 2005 just by selling carbon credits to developed country clients. It has also gained in terms of advanced technological improvements and related foreign investments. It has contributed to the underlying theme of green house gas reduction by adopting alternative sources of energy. Indian companies can make profits by selling the CERs to the developed countries to meet their emission targets. India has generated some 30 million carbon credits and has roughly another 140 million to push into the world market. US accounts for 30 per cent of global emissions, while India makes for three per cent. Now, India can transfer part of its allowed emissions to developed countries. Now companies in India can use Carbon credits to get liberal loans, incentives by multinationals in their countries and benefits like better social and ecological visibility Slide 3 Some of the Leading companies of India using & selling Carbon Credits Indias carbon credit market is growing, as many players (industries) are adopting the Clean Development Mechanism (CDM). Gujarat Fluoro Chemicals is amongst first companies worldwide to get its carbon emission reduction project certified. It is set to reap rewards from the sale of CER credits. Tata Steel is believed to have signed a MoU with the Japanese government agency NEDO for sale of credits accruing to it from carbon reduction following the implementation of an over Rs 250 crore modernization and upgradation project. NTPC and several state electricity boards have also applied for carbon credit benefits. Most of them are replacing coal-based technologies with more environment-friendly processes. Slide 4 Emission markets The Cost of one carbon credit ranges from 10 to 15 Euros. For trading purposes, one allowance or CER is considered equivalent to one metric tonne of CO2 emissions. These allowances can be sold privately or in the international market at the prevailing market price. These trade and settle internationally and hence allow allowances to be transferred between countries. Each international transfer is validated by the UNFCCC. Climate exchanges have been established to provide a spot market in allowances, as well as futures and options market to help discover a market price and maintain liquidity. Carbon prices are normally quoted in Euros per tonne of carbon dioxide or its equivalent (CO2e). Currently there are at least four exchanges trading in carbon allowances: the Chicago Climate Exchange, European Climate Exchange, Nord Pool, and PowerNext. The Multi Commodity Exchange of India Ltd entered into an alliance with the Chicago Climate Exchange in 2005 to introduce carbon credit trading in India