‘Market size for carbon credits trading around $300 bn/year’

The world-wide carbon credit sell is promising to become a significant source of funding for development projects across the world. However, the amount of money that can be sounded from this marketplace currently depends on how “charismatic” the projects — for which funding is being raised — are. Mahua Acharya, MD and CEO, Convergence Energy Work( CESL ), tells FE’s Anupam Chatterjee how the company’s LED programme has become particularly important after the COP 26 UN Climate Change Conference held in Glasgow in November 2021, where India constructed its 2070 net zero bulletin. Edited excerpts:

How do you think the world carbon recognition grocery is influencing up?

There is no one single market for carbon credits. While there are sovereign groceries, “theres been” the voluntary marketplace. We are using the voluntary marketplace for now. Private companionships have been preferring the voluntary market where rates of carbon recognitions vary significantly, from as low-grade as 10 pennies to $80 as pricing depends on various factors. The busines width for carbon approvals trading is around $ 300 billion per year, and this is set to become twice as enormous. The conformity market, though much larger as of now, is mostly restricted to internal transactions within EU nations.

How are these rates defined?

“Charismatic projects”, such as those which address poverty alleviation and increase women’s empowerment, tend to fetch higher costs. Projections such as rendering three-wheeler electrical vehicles, though they affect people’s lives and impact employments, have no specific guidelines for carbon credits. After Glasgow, along with India’s 2070 net zero edict, CESL’s LED programme becomes particularly important.

What is the status of CESL’s LED distribution programme and how does it aim to gain from the world-wide carbon trading busines?

We charge Rs 10 for each LED bulb in exchange for an incandescent bulb. The premium of the LED bulb we supply is around Rs 85, and there are other expenses of around Rs 15, taking the total cost to Rs 100. We have reached around 15 lakh by now, and the target is to distribute 1 crore LED light-headeds by March. After it is done, the process to issue carbon recognitions for the programme would begin, and is expected to be completed by July. We are hoping to sell the credits in world markets by August, where we are expecting a price of around$ 3- $3.5 per carbon credit.

Do you wish to take up such programmes all by yourself?

It would be great if state governments also actively participate in CESL’s programmes. Now, the capex of the programmes is borne by CESL. If state governments shared the capex, they can also gain from the earnings from carbon approvals or simply invest in energy efficiency. We are planning to reach out to the states to show them clearly how the mechanism works.

How are things in the other areas where CESL is operating?

For our EV bus programme, where we are the demand aggregators, we have received lineups from Hyderabad, Bengaluru, Delhi and Surat. We are also expecting lineups from Chennai, Ahmedabad and Kolkata. We will also considered extremely stimulated to get lineups from Mumbai and Pune as well. Altogether, we expect to place orders for more than 5,000 EV buses.

For the EV three-wheeler programme, we have already closed the tender and have discovered costs which are 20 -2 5% lower than the market paces. There are at present six finalists. The demand is a lot more than what we had expected earlier. We are currently speaking with financial entities and working out ways to fund the procurement.

Read more: financialexpress.com

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