Carbon credits earned via the clean development projects in India are set to generate R4,775 crore, up 20% from R3,950 crore last year. The projects fall under the purview of the Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change (UNFCCC).
With 795 registered projects, of the 3,930 projects registered with UNFCCC, India ranks second in the number of certified emission reduction (CER) credits, after China.
These CERs can be traded and sold, and used by industrialised countries to meet a part of their emission reduction targets under the Kyoto Protocol.
Under the CDM, emission-reduction (or emission removal) projects in developing countries can earn certified emission reduction credits.
Majority of these carbon credits are for projects involved in destruction of hydrofluorocarbons, but increasingly, renewable energy sectors are also getting into CDM to get carbon credits, said Chaitanya Kalia, partner, climate change and sustailability services, at E&Y.
Renewable projects comprise 70% of the registered projects with the rest coming from non-renewable sectors. India sells almost 90% of its credits to Europe and the rest to Japan.
Last year, India had 520 registered CDM projects with the UNFCCC. Among the public sector enterprises, ONGC, NTPC, NHPC, BEL and SAIL, among others, have benefited.
While Reliance Power has registered its three ultra mega power projects Sasan, Krishnapatnam and Tilaiya with a total capacity of 11,880 MW which would together generate 5.63 million CERs every year, Lancos gas-based plant in Tamil Nadu is set to earn two lakh CERs. Similarly, Tatas 50.4 MW wind farm in Maharashtra is expected to generate 8,600 CERs.
According to the ministry of environment and forests, CERs issued so far are 13.6 crore and the potential of the CDM projects may increase.