The Hindu Business Line : Cos warned against hoarding carbon credit

Eco Securities, a company that deals with trade and development of carbon credits, has warned Indian companies against "hoarding of carbon credits." Observing that the prices of `certified emission reductions' (CER) had crashed from 30 in May to 6 today, the Country Director of Eco Securities, Mr Pranav Nahar, said at a press conference on Monday that hoarding carbon credits and selling them in bunches would result in further lowering of prices.

He noted that India had the highest number of registered projects but not the largest number of carbon credits traded.

"Of the 300 million carbon credits generated by India, only 60 million have been used (traded)," said Mr Nahar. Indian companies generally wait for the price of a certified emission reduction. "Unfortunately the market is volatile and there is no common benchmark to value projects," said Mr Nahar. Companies must offload part of their carbon credit in the market — either for a fixed price or a floating value that depends on the carbon credit exchange rate, he said.

Over the next two years, India's potential is expected to rise beyond 600 million carbon credits. To utilise this, large-scale projects are necessary. "India has many small projects as opposed to China that has massive industrialisation projects. Investors prefer such large projects to smaller ones," he said.

Tamil Nadu rates high on Eco Securities' list of potential carbon credit generators. "At present, there are six registered projects in Tamil Nadu and I see this tripling by June 2007," said Mr Nahar.

The company is talking to the Tamil Nadu Spinning Mills Association for contracting a 1,000-MW project in the Tiruppur industrial area. The project consists of a cluster of small power generation units and was earlier taken up by another contractor. It is expected to generate about 80 lakh CERs.

Eco Securities has also tied up with Empee Sugars and Chemicals Ltd to facilitate three projects. Empee Sugars has invested Rs 160 crore in three power generation units that will totally generate about 1.6 lakh CERs. Two units of capacity 7.5 MW (a bio mass fuelled unit at Perambalur) and 20 MW (a bagasse-based cogeneration plant at Naidupet) would be operational in 2008 while a 7.5-MW biomass fuelled plant at Pudukottai would be operational by early 2007, according to Mr Shankraj, General Manager (Power Project), Empee Sugars.

Shriram EPC, part of the Shriram Group of companies, has tied up with Eco Securities to facilitate carbon credit generation for a 42-MW wind park project that is expected to generate about 84,000 CERs.