The Hindu Business Line : Shree Renuka Sugars registered as CDM project

THE Karnataka-based sugar mill unit of Shree Renuka Sugars has become the first bagasse cogeneration operation worldwide to be registered as a clean development mechanism (CDM) project at the United Nations Framework for Climate Change Convention (UNFCCC).

This is the fifth Indian project to be registered at the UNFCCC; other projects are based on different methodologies.

Registration is the formal acceptance by the executive board of a validated project as a CDM activity. It is the prerequisite for the verification, certification and issuance of certified emission reductions related to that project activity. Each certified emissions reduction (CER) stands for one tonne of carbon dioxide reduction and can be traded globally.

"The project is expected to generate 22,000 CERs per annum," Mr Narendra Murkumbi, Managing Director, Shree Renuka Sugars, told Business Line. By December 2005, the project is expected to accumulate about 35,000 CERs.

However, on the expected financial gains from the project through carbon trading, Mr Murkumbi said, "We would not like to enter into a forward contract to sell the CERs now. We would eventually enter the spot market and expect to get an attractive price. As per our information, market prices are currently hovering around 18 euros per CER."

It may, however, be pointed out that market prices of CERs are highly volatile and could range from four euros to 12 euros depending on various factors of the project.

Bagasse is a fibrous by-product obtained during crushing of cane at sugar mills. Combustion of bagasse as biomass helps generate electricity. This project will use the electricity generated in sugar production process at the unit.

UK-based Agrinergy Ltd is the consultant for this project. It is also advising the company on other cogeneration projects here and at other locations.

Other Indian projects registered at the UNFCCC include Gujarat Fluorochemicals Ltd's project for green house gas emission reduction by thermal oxidation of HFC 23 in Gujarat. Also registered is Kalpataru Power Transmission's electricity generation from mustard crop residues in Rajasthan. The third registration is the 5-MW Dehar Grid Project at Himachal Pradesh by Astha Projects.Hyderabad based-Clarion Power Corporation Ltd MW (gross) renewable sources biomass project that can generate 26,300 CERs per annum is also registered.

CDM promotes green house gas reducing projects in developing countries, allowing companies undertaking such projects to sell the resultant reduction in emissions to developed countries.

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