Gujarat Fluro sets record for sales of carbon credits

MUMBAI: Global warming due to greenhouse gases has opened a new path for Indian companies to make so much money that it sometimes exceeds their annual turnover.
A recent carbon credit sale by Gujarat Flurochemicals (known for Inox multiplexes) has created waves in Europe and Japan where companies are desperate to reduce carbon emissions at their factories.
Low-profile Gujarat Flurochemicals, which operates India’s largest refrigerant plant, has agreed to sell Rs 1,000 crore worth of carbon credits over the next three years to Noble Carbon Credits of Singapore.
The deal will bring in Rs 350 crore for GFL in the first year, sources said. The windfall is almost double the company’s sales of Rs 182 crore last year and more than 3.5 times its net profit of Rs 96 crore.
Under an international agreement, known as the Kyoto Protocol, signed by 141 countries except the United States and Australia, set emission caps for developed countries for 2008-2012 .
Companies there can either reduce greenhouse emissions to prescribed levels each year or offset actual emissions by purchasing carbon credits from companies operating in developing countries that have successfully reduced carbon dioxide levels. carbon.
The GFL transaction was also structured differently. He promised to sell half of the carbon credits to Noble until 2012 at a minimum price of $ 10 per unit. He can buy up to 35% of the market price with a floor of $ 10 per unit. GFL will be free to sell the remainder in the spot market.
Deepak Asher, the man behind the project and executive director of GFL, is unwilling to put a price tag on the global transaction.
GFL, which makes refrigerator coolant, has accumulated credits by burning waste gas by installing a thermal oxidizer at the plant in Gujarat, Asher said. GFL reduces nearly 12,000 tonnes of greenhouse gases (carbon dioxide) per day, which represents 6 million tonnes per year.
Ishani Chattopadhyay, country manager of Eco Securities, a global carbon credits trader, explains that this translates into millions of carbon credits. To obtain a carbon credit, a company must reduce its carbon dioxide emissions by one tonne.
Even though 70 to 80 projects have been registered with the United Nations for carbon credits in India, the Rs 1,000 crore deal is a record, she said.
Other companies that have sold carbon credits include the Kalpataru group, which runs a biomass-based power project, and SRF, which owns a hydrofluorocarbon plant.
Sources claim that each loan is sold for between $ 5 and $ 12 depending on risk factors, such as a guaranteed supply. Large companies get a better price than smaller ones. Currently, a carbon credit is traded at $ 10.
There are reasons for the mad scramble for carbon credits. The governments of Europe, Canada and Japan have set limits on industrial greenhouse gas emissions, the costs of which weigh on their companies’ balance sheets.
They must invest significant sums in technologies and processes to meet government guidelines on greenhouse gas emissions. They buy carbon credits to meet their emissions targets. Most of the credits come from countries like China and India.


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