The Hindu Business Line : Buyers prefer bundles of carbon credit

Hyderabad, Sept.12 India boasts about 800 CDM (clean development mechanism) projects in various States, offering additional income to small enterprises from the sale of emission reductions to buyers in the developed nations.

It is, however, not the number of small projects that can give the country an edge. “There are a lot many small CDM projects in India. But what it needs is bundlers, who can tag along the small projects and offer substantial number of emission reductions to the buyers abroad,” Mr Michel J.L. Pommier, Regional Carbon Finance Coordinator (South Asia) of the World Bank, told Business Line.

It is tough for international players to talk to many small players, register them and validate them. “We are not talking about projects that can give a few thousands (tonnes of emission reductions). They may need two, three, twenty million tonnes,” he said.
Viable mechanism

The IREDA (Indian Renewable Energy Development Agency), for example, could be a bundler. India should have a programme to aggregate the small players and offer these credits in bundles.

It is not useful for just the buyers. For sellers too it is a viable mechanism. “Small entrepreneurs cannot afford to focus on the CDM aspect as the volumes are too low. Also, it is not that easy for them to get their project registered and validated,” Mr N. Kalidas, Executive Director of Eco Carbon Private Ltd, said.

Eco Carbon is a Visakhapatnam-based bundler, who bundles units that adopted FaL-G technology (use of fly ash in producing construction material). It had commitments to bundle eight lakh tonnes of emission reduction in 10 years.
“But it is not a cakewalk. We have to meet our commitments. If one unit turns sick, we need to immediately find ways to make it functional again in order to honour the commitments,” he said.
Recognising the opportunity in other areas, the Visakhapatnam-based company now firmed up plans to tap the sponge iron units to recover energy from waste heat generated in the units. “We will help them set up power generating units,” Mr Kalidas said.
Mr T R Shanmukha, Managing Director of Veda Climate Change Solutions, too felt that the opportunity was huge if the small players, including the farmers, could aggregate their outputs.
The company too had experience in aggregating about 800 farmers in 2004 in six districts (three each in Orissa and Andhra Pradesh), with a total commitment of six lakh CERs (certified emission reductions) in four years and 1.5 million CERs in 30 years.

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