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In a world first, Indian carbon trader to come out with IPO

M Ramesh Chennai | Updated on November 16, 2020 Published on November 16, 2020

iStock.com/Chunumunu Chunumunu   -  Getty Images/iStockphoto

Indore-based Enking International may become the world’s first company that operates in the carbon markets space to go in for an initial public offering (IPO). Managing Director and CEO, Manish Dabkara, told Business Line today that it would file for the IPO in a few days.

The 12-year-old company operates in the emerging area of trading in carbon offsets. These are market-tradeable instruments (like Renewable Energy Certificates) that are issued to entities whose projects reduce xarbon dioxide emissions.

Enking buys these offsets from Indian companies and sells them to buyers abroad. Dabkara said the company’s topline for the half-year just crossed Rs 100 crore, achieving the milestone for the first time.

The company, which claims to be the world’s largest carbon credit developer and supplier, counts several big names in the Indian power sector among its customers: NTPC, NHPC, Indian Railways, GAIL, IOC, ReNew Power, Azure Power, Greenko and many others. Apart from trading in carbon offsets, Enking also helps companies build a ‘carbon neutral strategy’ and helps them get the offsets.

In 2019, carbon offsets worth $214 billion were traded globally, 34 per cent up from the previous year.

Trading in carbon offsets is expected to pick up once the rules for carbon markets are framed under Article 6 of the Paris Agreement. Carbon trading began under the Kyoto Protocol of 1997 (which came into force in 2005). Under this, ‘certified emission reductions’ or CERs, were issued to entities that put up projects that reduced emissions — such as wind, solar, or energy efficiency. These CERs were to be bought by developed countries. It didn’t work out well and Indian entities are left holding about 750 million worthless CERs.

However, today some countries and many companies buy offsets under what are called ‘compliance’ and ‘voluntary’ markets, respectively. But the real growth in the market is expected to happen only after the carbon market rules are framed under the Paris Agreement.

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Published on November 16, 2020
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