Carbon trading regime is yet to kick in, but the voluntary market is buzzing
MUMBAI , NEW DELHI : Mumbai/New Delhi: The market for voluntary carbon trading is picking up in India, even before the planned rollout of an official mechanism to speed up the decarbonization journey. However, an abundance of carbon certificates due to the flurry of renewable energy projects has dampened their prices, experts said. At the heart of this market are international renewable energy certificates (I-REC) accrued by the country’s fast-growing clean energy sector.
Around two dozen renewable energy producers sell these certificates, while buyers include multinational corporations including Big 4 consultants and large technology companies, industry participants said. “When I look at the domestic carbon credit market today it is mostly companies buying I-RECs. This is because everyone first wants to meet their energy transition targets and curb their scope-2 emissions," said Siddhanth Jayaram, co-founder at Climes, a firm that helps companies track and cut their emissions.
Scope-2 emissions are the indirect greenhouse gas emissions of a company caused by the production of electricity that it consumes. Scope-1 emissions are the direct emissions caused during business operations. One I-REC is equivalent to one megawatt-hour (MWh) of renewable energy.
Buyers can redeem these certificates to add the carbon emissions mitigated by this clean energy into their emissions tally to meet their net-zero targets. About 7.8 million I-RECs were issued in India in 2023, according to Evident I-REC registry data published by S&P Global in a recent report. Year-on-year growth in issuances was flat in 2023, after a 119% growth in 2022.
Read more on livemint.com
