The Hindu Business Line : Railways bid to enter carbon trading biz

INDIAN Railways has launched an exercise to weigh its energy-saving efforts in gold or should we say carbon gold. The CLW-developed new three-phase electric locos, based on ABB technology, and now fully absorbed into the system, has set the Indian Railways on the carbon credit trail, and if successful, may turn it into the first entity in the transportation business to enter the carbon trading business successfully.

Carbon trading will earn valuable cash for the Railways to spend on viable projects starved of funds. According to international estimates, carbon finance can provide 5-15 per cent of new project costs, and can make even marginal projects investment grade.

Mr R. Sivadasan, Financial Commissioner, Indian Railways, confirmed to Business Line that a carbon credit exercise has been set in motion, and presentations on methodology and other aspects of carbon trading have been made to the Railways on a Clean Develepment Mechanism (CDM) project by consultants such as Ernst & Young. He said even companies such as Siemens as well as some international banks have offered consultancy to carry the process forward right up to the trading stage for a fee.

Mr Sivadasan, who has had a long stint at the Chittaranjan Locomotive Works which makes three phase electric locomotives, as General Manager, said ABB locos while braking, discharge kinetic energy (energy of motion), which can be turned into electricity, helping the locomotive's motors to run the generator on board the train.

Describing the hi-tech loco as a "powerhouse on wheels", he said there was an energy-saving feature that is eligible for carbon credit. Since one of the key criteria for a CDM project was that it has to be a new project, the plan was to make ABB locos run on non-ABB locomotive corridors, and thereby effect a huge saving in energy costs.

ABB locos are far more expensive to buy than the non-ABB types, and if made to run on such corridors, substantial energy saving (some 10-12 per cent, to start with) can occur, garnering valuable carbon credit for the Railways, he pointed out.

The Railways have many areas of operations such as workshop modernisation, planting of trees on surplus land etc., all of which can qualify for carbon credits, said Mr Sivadasan. He said there was a clear opportunity here for the Indian Railways to earn valuable carbon credits, which when converted into cash, will go towards meeting projects in a big way.

The Railways, he felt, was actually sitting on a significant unrealised carbon asset, which can be utilised to provide a dollar stream. He, however, could not quantify the kind of money that may be earned through such trading at this stage.

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