Saturday, October 11, 2008

Europe gains carbon credits with India projects

The United Nations has issued credits to three projects in India for emissions reductions from renewable energy and energy efficiency.

The Kyoto Protocol’s Clean Development Mechanism rewards companies or developed countries with certified emission-reduction certificates (CERs) for helping developing countries reduce emissions. Those credits can then be used to meet Kyoto standards or sold to other countries (see StatoilHydro, ONGC to look at carbon capture and storage).

A credit currently trades for about €19 ($26 USD). The market for trading in carbon emissions is estimated to be in the range of $60 billion to USD $70 billion annually (see Global carbon trading value almost doubles in 2007). 

India has generated about 30 million carbon credits and is one of the largest beneficiaries in the carbon credit trade, according to Mumbai, India-based Multi Commodity Exchange (see MCX launches carbon credit trading in India).

Across the globe, 195 million credits have been issued through the program’s 1,170 projects. About 2,800 projects are in the application or registration process, with 155 projects applying for admission in September, the most recent data available. 

A new 8-megawatt grid-connected biomass plant in state of Chhattisgarh in central India, below Uttar Pradesh, received 47,482 credits.

The biomass plant achieved an equivalent annual offset of about 21,488 metric tons of COand annual production of about 47 million kilowatt-hours in 2007, its first full year of operation.

The plant developed by ISA Power uses rice husk from less than 100 kilometers (62 miles) away in the Rice Bowl region, which is around the Raipur, Dhamtari, Durg and Kanker districts. ISA Power estimates that 1.3 metric tons (2,866 pounds) of rice husk can generate 1 MW of power. The availability of rice husk is 267,000 metric tons, while the plant’s capacity is 70,000 metric tons.

The UN also issued credits to Germany for a 4.5 MW grid-connected hydroelectric power plant in Himachal Pradesh in northern India. The Maujhi project received 7,507 credits for 2007 and had banked 21,881 credits since July 2004.

The run-of-the-river project by Dharmshala Hydro Power draws power from the Maujhi Khad, a small tributary of river Beas that drains in the Kangra District. The Rs. 265.3 million (USD $5.77 million) project generates about 20 million kWh a year for the state-owned Himachal Pradesh State Electricity Board, representing an offset of about 13,168 tons of CO2.

The third set of credits went to the United Kingdom for energy-efficiency improvements at ITC Paperboards & Specialty Papers in Andhra Pradesh, about 300 km from Hyderabad. The project made efficiency improvements at its pulp-and-paper mill, which is one of the largest in India. Those upgrades have reduced energy consumption by 13.38 gigawatt-hours a year.

The UN issued 2,056 credits to the paper mill, which also generates power using steam. Additionally, black liquor solids from wood pulp, a byproduct of the paper mill, is a climate-neutral fuel, according to the Intergovernmental Panel on Climate Change. The mill has received 13,314 credits since April 2002.

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