| Sourced From The Business Line |
United Nations body also makes norms more stringent.
New Delhi, March 7 The economic slowdown, visible through the drop in industrial production in the past few months, also seems to be affecting the ability of the companies to generate carbon credits. The number of carbon credits that are issued to the ITC group, Reliance Industries Ltd, Jindal and Tata group companies from 2002 onwards has seen a sharp decline in the last one or two years, compared with the carbon credits earned in the previous years.
This is based on the search for Indian companies earning carbon credits on every tonne of carbon dioxide that they reduce, compiled by the Institute for Global Environmental Strategies (IGES), set up by the Japanese government.
“Due to unprecedented economic conditions, if the production of the basic commodity or the project through which carbon credits are generated falls, then certainly it will affect the certified emission reductions (CERs) that are issued in a particular period,” said Mr Suresh Iyer, Deputy General Manager, who coordinates carbon credits projects for the Jindal group.
An official from Reliance Industries stated that verification time on the carbon credits generated from the project was also taking time. “But we have been accumulating. So we will apply now,” the official said without giving further details.
Technological performance
“The slowdown in the number of CERs issued could also be because the technological performance may not be as predicted at the time of registering the project,” cited Mr Sudeep Rathee at NCDEX, a platform to trade carbon credits. Besides, he reckons that companies could also be holding on to the credits, waiting for the prices to recover. At present, the prices per CER have been reduced by half, to less than €10.
But this is not the only reason. The United Nations Framework Convention on Climate Change, the body which approves all the projects, has also tightened its norms.
“This shows that UNFCCC has made its norms stringent, making it difficult for projects to earn the same level of carbon credits,” points Mr K. Umamaheswaran, from the carbon procurement unit of the german firm GTZ International.
