The Hindu Business Line : Carbon credits trading — UN panel extends deadline for prompt start projects

IN a move that would benefit several Indian projects wanting to trade carbon credits, the UN panel has extended the December 31, 2005 deadline for `prompt start' projects by one year to December 31, 2006.

Prompt start projects are those that commenced their activities between January 1, 2000 and November 18, 2004. They could have potentially generated carbon credits during the four-year period.

Earlier, these projects had a December 31, 2005 deadline for UN registration to get full benefits because the Kyoto Protocol rules said that if registered after the said date, the projects would not be allowed to trade carbon credits generated prior to the date of registration. They could trade only those carbon credits that they accumulate after December 31, 2005.

However, to get the benefit of the extended deadline, the validation process for these projects should have started before December 31, 2005.

When contacted, Mr Naresh Dayal, Additional Secretary, Ministry of Environment and Forests (MoEF), said "The project owners should have engaged a designated entity to get the UN validation process through and simultaneously worked for getting host country approval from the MoEF." The Ministry had also written to the clean development mechanism (CDM) executive board making a case for one-year extension.

The decision to shift the deadline was taken at the recent meeting in Montreal of the United Nations Framework Convention on Climate Change (UNFCCC). "The prompt start project activities that ... have not yet requested registration but have either submitted new methodology or have requested validation by a designated operational entity (DOE) by December 31, 2005 can now request retroactive credits after they are registered by the CDM executive board by December 31, 2006," Mr A. Raja, Minister of Environment and Forests, said in Parliament today.

Industry experts pointed out that the extension would benefit several companies. "Projects on baggase-based cogeneration, and some projects whose methodologies had been earlier rejected are likely to benefit, apart from others," said Mr Robert Taylor, Director, Agrinergy.

India sees Rs 14,765-cr earnings

INDIA envisages Rs 14,765 crore of earnings through carbon trading, according to Government estimates.

"India has accorded host country approval to 203 clean development mechanism (CDM) projects, which are expected to generate 195 million certified emission reduction units (CERs) and envisage an investment of Rs 14,765 crore in the country," Mr A. Raja, Environment Minister, said.

These earnings would be spread over a 10-year period, according to industry experts.

Each CER stands for one tonne of carbon dioxide reduction and can be traded globally.

The CDM projects are those projects that can generate CERs.

Meanwhile, projects of Gujarat Ambuja Cement, Oswal Woollen Mills, Nahar Spinning Mills, Sai Spurthi Power (P) Ltd and a biogas programme based out of Bagepalli were recently registered at the UN.

With these, 14 Indian projects have been registered till date.