Market for carbon trade growing, says expert

Dr K Kasthurirangaian, chairman, IWPA, speaks at an event on carbon credit  

The Indian Wind Power Association (IWPA) in association with M/s EKI Energy Services Ltd, convened a meeting in Coimbatore, Tamil Nadu, on December 16th. Around 90 Members participated in the event.

Owing to the demand for carbon credit in the global market and considering the benefits that it will accrue to IWPA Members, IWPA engaged the services of M/s EKI Energy Services Limited--an Indore based firm. EKI aims to help organizations to achieve their climate ambition.

Dr K Kasthurirangaian, chairman, IWPA, spoke on climate change and its impact on India’s future renewable energy production. “In order to preserve the plant and make it liveable, greenhouse-gas emissions must be reduced by 2030 and to net zero by 2050,” he said.

On the other hand, Samrat Sen Gupta, director-sales, M/s EKI, spoke on the carbon credit mechanism, climate change and net zero. “From the year 2010 to June 2022, India issued 35.94 million carbon credits or nearly 17% of all voluntary carbon market credits issued globally. The market for carbon credits increased by 164% globally in 2021 and it is anticipated to reach $100 billion by 2030,” he explained.

Carbon offset, he added, represents a real reduction of carbon dioxide in the atmosphere and results in the generation of carbon credit. Gupta also spoke about the two main categories of carbon markets---cap-and-trade and voluntary. Cap-and-trade sets a mandatory limit (cap) on greenhouse gas emissions and organizations that exceed these limits can purchase excess allowances to fill the gap or pay a fine. Voluntary markets enable the trading of carbon credits outside the regulatory environment.

It is estimated that the carbon credit market will grow at a compound annual growth rate of nearly 31% from 2020 through 2027, with a value reaching $2.4 trillion. In 2019, the market was valued at $211.5 billion. In the United States, no national carbon market exists, and only California has an established cap-and-trade system. He concluded by mentioning that global warming is one of the major threats to humankind and major efforts on a global scale are needed to lessen its negative impact.