New Delhi: The Chicago Climate Exchange (CCX), the only platform for exchange of carbon offsets in the US, has expanded its operations into India and Brazil for the first time.
The exchange, which is one of its kind in the world, registers and trades greenhouse gas emission reductions for voluntary but legally binding carbon reduction commitments. At present, CCX has crossed reduction commitments for 540 million tonnes (mt) of carbon dioxide.
From India, three organizations have been accepted as offset aggregators for smaller projects and E-Square Verification Pvt. Ltd, a New Delhi-based verifier of carbon offset projects, is the first Indian verifier to be accepted on board at the CCX.
“Since carbon reductions are not tangible, the exchange needs verifiers or technical hands, who validate the credibility of the project at the field level. After we submit our report, it is investigated again by a third party before it is registered by CCX,” said V.K. Khanna, director-technical, E-Square.
The company has already signed up three parties for verification, which are at present at different stages of registration at CCX.
E-Square receives its verification cost from the project proponent it verifies.
Though the US is not a signatory to the Kyoto Protocol, several US companies voluntarily commit to reduction of carbon emissions in a bid to reduce global warming. This is where the exchange comes in, by facilitating the sale of carbon financial instruments, the same as carbon credits under the Kyoto Protocol.
The three offset aggregators, which have also been approved by CCX, include Madhya Pradesh Rural Livelihoods Project (MPRLP), the Rajasthan Renewable Energy Corp. Ltd (RREC) and Reliance Energy Ltd.
Aggregators are agencies which bundle smaller offset projects to apply for carbon credits as a whole when the projects are individually too small for the registration, verification and transaction costs to be economically viable.
“Aggregators are the go-between for the small projects and the exchange,” explained Khanna.
MPRLP, which works to create new livelihoods mainly in the tribal areas of the state, will aggregate credits for small-scale biogas plants in the initial phase.
“We plan on getting about 30,000 biogas plants verified. Madhya Pradesh currently has 1.5 lakh biogas plants with 10,000 plants added every year,” said Ritu Bharadwaj, state coordinator, MPRLP.
“A two-tonne biogas plant, on an average, earns 3,500 credits annually.”
MPRLP hopes to get verified by the end of this month for the biogas projects, most of which are individual plants.
RREC will also work as the nodal agency for renewable energy and energy efficiency projects in the state while Reliance Energy will do the same for the group’s projects.