Southern Bio gets nod to sell carbon credits

The bio-diesel project of the city-based Southern Online Bio Technologies Limited has become the first project to receive the nod from the ministry of environment and forests to sell certified carbon emission reductions to global carbon purchasers.

Southern Online Bio plans to set up the bio-diesel plant at Samsthan Narayanpur in Nalgonda district. The Rs 14.84 crore plant aims at producing 30 tonnes or 32,000 litres of bio-diesel per day from oil-bearing seeds such as pongamia pinnata, jatropha curcas etc.

As per a report by the city-based consultants, Zenith Energy, greenhouse gases equivalent to 27,000 tonnes of carbon dioxide can be avoided each year from the production of 30 tonnes of bio-diesel per day.

The 'host-country approval' from the ministry now makes it easier for the company to sell carbon emission reductions under the terms laid down by the United Nations Framework Convention for Climate Change.

The company cannot, however, sell carbon emission reductions to any agency, company or organisation using the official development assistance (ODA) funds.

According to Southern Online Bio managing director N Satish Kumar, a consortium of German companies, the World Bank, and other private groups have evinced interest in purchasing carbon from the company.

Recently, Southern Online Bio became the first bio-diesel project in the country to be recommended by any state government for the centre's approval for getting external funding. The Rs 14.84 crore project is appraised by German Technical Cooperation (GTZ), a financial institution.

Around Rs 6 crore is being raised through internal accruals, while Rs 9 crore is to be mobilised either through debt or equity. GTZ has sought the central government's approval for any funding.

Satish Kumar said that raw materials could also be acid oils, distilled fatty acids and animal fatty acids. The commercial operations are likely to commence in April 2005, he said.