A United Nations panel recommendation this week to change carbon credits calculating methodology for hydroflourocarbons (HFCs) can result in India losing half of its credits valid till 2012.
Certified Emissions Reduction Units (CERs), also called carbon credits, for the destruction of hydroflourocarbons (HFC) represent over 80 percent of the total credits issued till date under UN’s Clean Development Mechanism (CDM) to India. HFC has highest credit value, as a tonne of HFC emission saved means 11,700 carbon credits earned.
A coalition of green groups working under the banner CDM Watch had tabled a formal request calling on the UN's climate change secretariat to overhaul the CDM and crack down on alleged “gaming” of the system that has allowed some firms to benefit from increasing their greenhouse gas emissions.
They alleged that companies in developing world such as India and China have got incentive to increase green house gas emissions to earn more credits. In India, four companies including public sector Gujarat Fluorochemicals have earned credits for capturing and destroying the greenhouse gas HFC-23, a by-product resulting from the production of the refrigerant gas HCFC-22.
A UN panel on methodologies called Meth Panel this week said that many companies were producing more HFC for a tonne of HCFC produced than technically feasible. Some companies were only producing HCFC in a bid to earn credits, the panel said in a report to CDM executive board. The board is expected to consider the report at end of July.
Seeking a proper investigation into the carbon credits earned, the panel has recommended revision of the rate at which carbon credits from HFC is calculated. As against the present waste rate of three percent of the total chemical burnt, the panel has recommended a rate of 1.4 per cent.
“The new rate suggested, if accepted by CDM Executive Board, could mean Indian companies losing 50 per cent of the credits earned,” said Anmol Jaggi, Director, Gensol Consultants, a firm that helps in calculating carbon credits. It would mean a loss of 130 million carbon credits by 2012.
“If the UN CDM Executive Board wants to reinstall the integrity of the mechanism it has no other choice than to put current crediting methodology on hold with immediate effect and cease issuance of all credits for the destruction of HFC-23 untill the panel has fully investigated the issue,” said Eva Filzmoser, director of the NGO group CDM Watch.