The Hindu Business Line : Balrampur Chini, IFC sign carbon credit agreement

THE first Carbon Emission Purchase Agreement in India worth over $10 million has been signed by the International Finance Corporation (IFC) with a sugar manufacturer.

The IFC-Netherlands Carbon Facility (INCaF), a joint initiative of the IFC and the Dutch Government, has signed an emission reduction purchase agreement with Balrampur Chini Mills, an IFC client and operator of two bagasse (sugarcane waste) cogeneration plants, one at a sugar mill in Balrampur and another new plant at Hydergarh.

The agreement envisages sale of some of the plants' emission reduction credits created by burning cleaner fuel. In Uttar Pradesh, less than one per cent of power is generated from bagasse.

These plants will be the first in the State to use high-pressure design for both cogeneration and export of mill-generated bagasse. They will generate power and steam, exporting electricity to the Uttar Pradesh power grid even during the off-season, an IFC release said.

Carbon credits, unlike the dollars and euros that trade for physical goods and services, are a new money exchange intended to reduce pollution, particularly emissions of carbon dioxide that is caused by burning fossil fuels. Carbon emissions are said to be the leading cause of global climate change.

Sales of carbon credits take place under the Clean Development Mechanism of the Kyoto Protocol and will be used by the Netherlands Government to comply with its commitment under the protocol.

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