Although awareness about carbon credit trading is yet to pick up full steam in India, those who are in the know of opportunities are gearing up to cash in on it, in a big way. It was these motives that the Capital, during the last one week, witnessed a string of conferences and seminar on the issue. 

Federation of Indian Chambers of Commerce and Industry (FICCI) organised a three-day conference 'India Carbon Market Conclave 2008' from October 14-16. The subsequent seminar titled 'Carbon Credits Trading: Emerging Business Opportunities' was organised on October 21 by Financial Technology Knowledge Management Company Ltd. (FTKMC) - a consultancy, training and research group. 

Whereas the FICCI-organised event focussed more on Project Showcase, Buyers' Showcase, Structured B2B Meet and providing a platform for building partnerships and business linkages among carbon market stakeholders, the latter proved to be a one-to-one interaction on business opportunities. 

Speaking on the inauguration of FICCI conclave, Vilas Muttemwar, Minister for new and renewable energy said that the energy sector accounts for around 61 per cent of the total national emissions. Fossil fuels and coal combustion had a dominant share of emissions, amounting to around 64 per cent of all energy emissions.

Speaking on the role of renewable energy, the Minister said that the Indian Clean Development Mechanism (CDM) projects constitutes around 28 per cent of total projects and 65% of these projects emanate from renewable energy. Speaking on the same spirit, Harsh Pati Singhania, senior vice president, FICCI highlighted the fact that the Indian CDM project portfolio has grown exponentially, from 297 projects in April 2006 to 753 projects in September 2007 to 1,114 projects today, with over 536 million carbon credit potential up to 2012.

The conference strongly recommended the need of reforms in the CDM framework beyond 2012, which must address ways to support mitigation by public entities to a greater extend through the CDM route. The conference also sought a clear direction from the government on the treatment of revenues from carbon credits. The meeting was of the view that carbon credits should be treated as export earnings and it was felt that high transaction costs of CDM projects, levying of taxes would result in a major setback.

The Govt of India recently announced its National Action Plan on Climate Change in July 2008, reinforcing the need of climate change mitigation and adaptation actions. A section of conference also felt that the National plan was better timed as India crossed one-thousandth marks in its total carbon credit project.

The other seminar organised by FTKMC highlighted the real time business in the carbon credit sector. It felt that India was at a vantage position of leveraging itself for technology transfer from Annex 1 countries. The carbon emission of India in 1990 was lower than the world average. Since India has a lower emission compared to its developed counterparts, it does not qualify for mandatory emission targets. 

The meeting also underlined the fact that India has a very attractive CDM portfolio with a market share close to 12%. Indian revenues are expected to grow by $10 billion by 2012. Out of the 806 projects registered India bags nearly 35.7%.

The number of expected annual Certified Emission Reductions (CERs) in India is hovering around 28 million and considering that each of these CERs is sold for around 15 euros, on an average, the expected value is going to be around Rs 2,500 crore. CDM can pave the way for around Rs 18,500 crore of investment by 2012.

Giving an introduction to the carbon market, Sarika Rachuri of FTKMC said that EU Emission Trading Scheme EU-ETS is one of the biggest trading schemes dominating the carbon space which was launched in 2005. Elaborating on the implications of Kyoto Protocol she said that it offered cost reduction in Green House Gas (GHG) abetment and has increased the investment opportunities in green and clean technologies by incentivising it.

The other person who spoke on the occasion was Umamaheswaran of GTZ - a German company which is into bilateral development. He narrated the different stages of carbon credit generation and said that carbon credit is basically reduction in emission on GHG which is caused by a project. He said that CDM Project activity cycle included validation and registration, implementation and monitoring, verification and certification and trading & CER's delivery.