Dwarikesh Sugar to sell carbon credit

Is in talks with UN agency to get registration.

Dwarikesh Sugar Industries will sell its accumulated carbon credit in the current financial year to raise funds, said a top company official.

The company is in talks with the United Nations Framework Convention on Climate Change to get registration for selling its carbon credits.

"We are in talks with one of the UN agencies to get carbon credit from our current project and also the project that we carried out last year," B J Maheshwari, assistant vice-president (taxation) and company secretary, Dwarikesh Sugar Industries, said.

"We will be eligible for further credits as and when we expand," he said.

Signatories of the Kyoto Protocol are bound to cut greenhouse gas and carbon dioxide emissions. Developed nations usually buy carbon credits from units that tend to cut the emissions.

A project, for instance, becomes eligible to sell 1 tonne of credit if it enables a reduction of 1 tonne of carbon dioxide emissions.

According to the Kyoto Protocol, developed countries need to cut emissions of greenhouse gases by about 5 per cent during 2008-2012, from the 1990 levels. Developed nations can offset their emissions by buying carbon credits linked to emission-reducing projects.

He, however, did not give the exact amount the company plans to raise but hinted that in 2006-07 Dwarikesh could realise more than Rs 97 lakh.

According to market estimates, the average price of a tonne of carbon credit ranges between $3 and $7.

Dwarikesh Sugar plans to cut greenhouse emissions from its current co-generation power plants with capacities of 26 mw. The power plants are fuelled by bagasse, a sugarcane by-product.

The company has two sugar units located in Bijnor district of Uttar Pradesh "� Dwarikesh Nagar and Dwarikesh Puram.

"Dwarikesh Nagar has a capacity of 6,500 tonne crushed per day, 17 mw of co-generation, and 30,000 litre per day distillery," said Maheshwari.

Dwraikesh Puram, which commenced its operations January 1 has a crushing capacity of 7,500 tcd and nine mw co-generation capacity, he said.

The company has an agreement with the Uttar Pradesh Power Corporation for the sale of 8 mw power. The agreement was entered into 2001.

The company, with a view to reducing greenhouse gas emissions, is planning to sell the carbon credits accumulated from the sale of power to the Uttar Pradesh Power Corporation.

"The income generated from the sale of carbon credit will be additional income for the company and will improve the bottomline... The quantum and the value of carbon credit will depend on the agreement with buyers," said Maheshwari.

"We will be able to mop up an additional Rs 1.75 crore by 2007-08, once we further expand our co-generation facility by 15 mw," he said.

The Indian government has so far approved 227 carbon credit projects.

Gujarat Flurochemicals is the only Indian company that has received permission for trading in carbon credits as yet.

India's share in the carbon credit industry is around 20-25 per cent of the global market.

Some of the players whose carbon credit projects have been registered include Rajshree Sugar and Chemicals, JCT Phagwara, Alwar Power Company, and Deepak Spinners, among others.