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Carbon credits: UN panel for taking thermal plants off list

business Updated: Jul 08, 2011 00:01 IST
Chetan Chauhan

In a move that can adversely hit India's low carbon approach a United Nations panel wants energy efficient thermal power plants not to be considered under global carbon offsetting scheme, the Clean Development Mechanism (CDM) as claims on emission reduction were inflated.

In a report submitted to CDM Executive Board, a body that decides on the nature of the products that can be allowed, the panel sought suspension of carbon trading for super critical thermal plants as emission reductions claimed have been overstated by 25 to 50%.

India had embarked upon cleaner super critical coal technology to harness its energy needs under Ultra Mega Power Plants scheme and earn millions of US dollars under the CDM regime. The Adani group had received board's approval for its super-critical thermal power plant in western Indian state of Gujarat and Tata is already building another one in the state.

Believing that these energy efficient power plants can foster India's low carbon approach, environment minister Jairam Ramesh had justified the approval of new coal blocks saying they will help in running lesser polluting power plants.

"In the worst case the implementation of the project that claims emissions reductions, in fact, might have caused an emissions increase," the panel said, in its recommendations submitted for consideration of the board on Wednesday said.

The recommendation was based on review of three registered, including one from India, and 27 under evaluation projects for registration with the CDM board. Once the board approves the credits claimed by registered projects, the companies can sell them to richer countries, under obligation to offset their emissions.

A carbon credit is equal a tonne of emission reduced and sells for about $ 15.

The original estimate of emission reduction by these projects was 34 million tonnes of carbon dioxide equivalent but the panel found that claim to be inflated by 25 percent. In some cases it was as high as 248%.

The panel found fault in baseline surveys conducted by respective countries to determine the efficiency levels of existing thermal powers plants in mid 2000, after the CDM board approved the technology, saying under-evaluation was done.

"Extra caution should be given to ensure that the baseline emissions are estimated in a transparent and conservative manner," the panel said, while questioning the regime.

Indian officials, who are studying the panel's recommendations, would be protesting against the recommendation at the CDM board's meeting on the ground that the evaluation has been done as per UN approved methodology.

"We have committed huge investments in the super critical thermal sector believing that some of the high investment would be paid back through carbon trading," an environment ministry official said, adding that in the past also European lobbied have tried to scuttle consideration of fossil fuel based clean technologies under CDM.