india's first Clean Development Mechanism (cdm) project under Kyoto Protocol (kp) , the global pact to fight climate change, has been approved. Refrigerant-gas manufacturer Gujarat Fluoro-Chemicals (gfl), based in Vadodara, Gujarat, has become the first Indian company and the third in the world to have an emission-reduction cdm project certified by the cdm executive board , established under kp. cdm allows developed nations to achieve their greenhouse gas (ghg) emission reduction targets, set by kp , by investing in clean projects in developing countries. Companies can trade carbon emissions like a commodity.
gfl makes hcfc22, a coolant used in air-conditioning and refrigeration applications. hfc 23, another flurochemical and a potent ghg, is generated as a by-product. gfl's cdm initiative involves adapting an eco-friendly process to ensure hfc 23 is not emitted.
gfl will sell its carbon emission reductions (cers), with one cer equivalent to the reduction of a tonne of carbon dioxide. It is likely to generate three million cer s annually and make anything upwards of us $21 million (Rs 92.4 crore) a year, says Deepak Asher, vice president (corporate finance), gfl. Media reports said gfl has entered into deals to sell cers to the uk in 2005-06 and to the Netherlands in 2006-07 at us $13.5 per tonne and us$18.9 per tonne, respectively. "At present the average rate of cer is us$9. This is very less, as sellers are not informed about the market and buyers are not well established," says Dinesh Babu, head, climate change, Asia Carbon International bv, Singapore, a company working on kp mechanisms.
"There is no official instrument to ensure price increase, as it is difficult to classify the projects. Entrepreneurs will have to see that they get the best prices." Babu warns if developing nations are forced to reduce carbon emissions in future, they will only have the option of investing in high cer projects.
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