Carbon Credit

A carbon credit is a generic term for any tradable certificate or permit representing the right to emit one tonne of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent (tCO2e) equivalent to one tonne of carbon dioxide. There are six green house gasses and any of these gases if reduced/avoid/sink from the atmosphere, carbon credits can be earned.  These gases are Carbon dioxide, Methane, Nitrous oxide, Perfluoro carbons, Hydrofluoro carbon and Sulphur hexafluoride. International treaty like CDM under the kyoto protocol along with VCS provides a robust platform to develop GHG emission reduction projects which will further earn carbon credits (Emission reductions).

Carbon Credits an Incentive for Better Waste Management

Waste management is one of the potential sectors under the Clean Development Mechanism. Solid waste management practices release high quantities of green house gases in the atmosphere. This sector therefore creates significant opportunities for carbon mitigation, which could eventually become tradable carbon credits. Following procedures can be used to reduce/avoid GHG emissions from the waste materials.

1) Avoidance and utilization of methane from the landfill side: Methane (CH4) constitutes approximately 50% of landfill gases, with the remaining 50% being CO2 mixed with small quantities of other gases. If these gases are not collected, would escape to the atmosphere causes global warming. Mitigation/abatement option is available to capture and utilize the methane for energy generation.

2) Energy generation through the process of pyrolysis using waste as a raw material: Pyrolysis is a thermo chemical decomposition of organic material at elevated temperatures in the absence of oxygen. It creates combustible gases for further use by using organic waste.

3) Energy efficiency/ saving through recycling of the waste material: It is always useful to recycle the waste material. Recycling process consume about half of the energy to produce same quantity of products which would have been otherwise made from the virgin material. As per the Energy Information Administration (EIA) website, a paper mill uses 40% less energy to make paper from recycled material than it does to make paper from fresh lumber.

Another example of plastic good manufacturing industry, Virgin plastic resin costs 40-50 % less than recycled resin. Plastic recycling process includes recovering scrap material or waste plastics and reprocessing the material into useful products.

As of 2011, there is a total of 10 registered projects fetching about 889,358 CERs /annum (Corresponding to a revenue potential of 0.5 billion INR). Presently 32 CDM projects are under validation stage seeking for registration. These projects can generate more than 10 million CER’s/annum (Corresponding to a revenue potential of around 6 billion INR)

Carbon Credit Benefits of Sewage to Energy

Projects based on generation of electric power from biogas, which is being produced as a result of digestion of sludge in STPs, are eligible for CDM (Clean Development Mechanism), as it will help in reducing and stabilizing the emissions due to methane which is a green house gas.  Based on the potential of biogas/power generation from STPs, expenditure on O&M can be offset by earning ‘carbon credits’ on recurring basis. Some sewage treatment plants in India are on the verge of getting the carbon credits for its efforts for reducing the carbon-dioxide emission in their sewage treatment plants.

Benefits of CDM in SWM:

·         Reduction of greenhouse gas (GHG) into the atmosphere.

·         Addition of electricity to the National grid.

·         Collection of Methane otherwise released into atmosphere hence protection of environment.

·         Income generation and technology transfer.

·         Poverty alleviation and sustainable development.

Indian Scenario:

India generates close to 40 million tons per year of Municipal Solid waste (MSW) every year 1 and is expected to cross over 125 million tons by 2030. In order to manage such a huge waste generation, a national policy and legislation for MSW management, titled the Municipal Solid Waste (Management and Handling) Rules. The Indian market is extremely receptive to Clean Development Mechanism (CDM). Having cornered more than half of the global total in tradable  certified  emission  reduction  (CERs), India’s  dominance  in  carbon trading  under the clean development mechanism (CDM) of the UN Convention  on  Climate  Change  (UNFCCC)  is beginning to influence business dynamics in the country. India Inc pocketed Rs 1,500 crores in the year 2005 just by selling carbon credits to developed-country clients. Various projects would create up to 306 million tradable CERs. Analysts claim if more companies absorb clean technologies, total CERs with India could touch 500 million. Of the  391  projects  sanctioned, the  UNFCCC  has registered  114  from  India, the  highest  for  any country. India’s average annual CERs stand at 12.6% or 11.5 million.  Hence, MSW dumping grounds can be a huge prospect for CDM projects in India. These types of projects would not only be beneficial for the Government bodies and stakeholders but also for general public.

Global Scenario:

A total of 1,190 projects worldwide were registered as on 1 November 2008 as CDM projects and a total of 204 million credits have been issued. From this total number of registered CDM projects, 297 are from the waste handling/disposal sector and can be further categorised as follows:

·         182 projects are related to biogas (mainly from animal waste and waste water treatment);

·         99 are methane recovery and utilisation; and the remaining 16 are methane avoidance projects.