TAPPING THE CARBON MARKETS

Give your brand a green advantage

January, 2011

CONTENTS
INDUSTRY: GROWING REQUIREMENTS OVER TIME INTERNATIONAL CARBON MARKET EMERGING NEED PROPOSED APPROACH CARBON FOOTPRINT: AN IMPORTANT STEP IN GOING GREEN CLEAN DEVOLOPMENT MECHANISM (CDM) ECOLOGIKOL ROLE ABOUT US

Industry: Growing Requirements over time

Over the years, stakeholders have required industry to implement various Compliance initiatives such as: Quality Safety Social Accountability Ethical Standards Environmental Standards What Next?

The New Need is for Green: Are we Ready?

Market, Policy and Regulatory Forces are driving Organisations towards Green initiatives Market Forces
International Carbon Market Increasing cost of energy Increasing consumer awareness and demand for greener products, services and supply chain Major corporations are going Green creating peer pressure Stakeholders expectations on organisations to act Environmentally responsible Reducing cost of clean technologies and easier access Customers prefer greener services/products and in many cases, are willing to pay a premium for such services Globally, there is a shift towards Greener Lifestyles and Eco living

Policy Forces
National and International Action Plan on Climate Change National and International incentives for Renewable energy and Clean Tech

The New Need is for Green: Are we Ready?

Market, Policy and Regulatory Forces are driving Organisations towards Green initiatives Regulatory Forces (existing and proposed)
Mandatory Energy Efficiency Standards Mandatory Emission caps by Governments Proposed Carbon tax for emission and fossil fuel intensive exports Mandatory Renewable Energy Targets

International Carbon Market

Consume r preferen ce

The Emerging Need

A glance of the regulatory, policy and market forces as explained above clearly indicates the following:

The impact of climate change related forces are becoming critical to businesses

These forces are dynamic and growing at a fast pace A Sustainability Strategy is the first step in consolidating all climate change related matters of the Company and would help in informed and objective decision making

This shall start with a Carbon and Ecological Footprint Assessment of the organisation

Proposed Approach

CARBON FOOTPRINT

Carbon Footprint: An important step in Going Green

Carbon Footprint is a measure of the impact a product/service has on the environment in terms of the amount of green house gases produced It involves the assessment of emissions from energy consumption, processing, transportation, waste management, raw material and supply chain among others The Carbon Footprint of a product or a service could be determined and represented as tonnes of CO2 per unit service or product A verified Carbon Footprint of a product/service can be published The GHG emissions associated with a service/product can be measured and reduced or offset by means of other emission reduction credits A product/service with net zero GHG emissions can be labelled as Carbon Zero (eg: xxxxxxxxxxxxxx)

THE PROCESS
Assessment of Emissions are categorized under nine broad categories: Energy use Chemical reactions Combustion process Refrigerant loss Operations Service provision and delivery Land use change Livestock and other agricultural processes Waste

CLEAN DEVELOPMENT MECHANISM

Climate Change
Climate Change is the enhanced Greenhouse Gas effect The greenhouse effect is a natural phenomenon that helps regulate the Earths temperature. Greenhouse gases act like an insulating blanket, trapping solar energy that would otherwise escape into space. Without the natural greenhouse effect, Earths temperature would be about 30 C lower than what it is now. Anthropogenic activities, primarily the burning of fossil fuels have increased the natural green house effect. As a result, the average atmospheric temperature increases resulting in Climate change

GHG and Climate Change

Green house gas (GHG) Carbon-di-oxide (CO2) Methane (CH4) Nitrous oxide (N2O) Per fluoro carbons (PFCs) Hydro fluoro carbons (HFCs) Sulphur hexa fluoride (SF6) Global Warming Potential (GWP) 1 21 310 Upto 9,500 Upto 11,700 23,900

Human activities are increasing the concentration of Green House Gases (GHGs) in the atmosphere. This enhances the green house effect, commonly known as Climate Change

International Carbon Market

Consume r preferenc e

Carbon credits are generally traded in tonnes of CO2 equivalent. 1 tonne of CO2 reduction = 1 carbon credit

INTERNATIONAL CARBON MARKETS

KYOTO CARBON MARKET Kyoto Protocol was formed by the UN to reduce global GHG emissions It provides GHG reduction targets for Annex-1 (developed) countries (5.2% below 1990 level for the period 2008-2012) Negotiations are underway for the subsequent periods VOLUNTARY MARKETS Several socially responsible Companies, Individuals, Events etc are reducing their carbon footprints by purchasing carbon credit offsets REGIONAL MARKETS National and State Governments have developed their own carbon reduction programs with cap and trade schemes

Clean Development Mechanism

Kyoto Protocol requires developed countries to reduce their emissions by specific amounts The Clean Development Mechanism (CDM) is an arrangement under the Kyoto Protocol allowing developed countries with GHG reduction commitment to invest in emission reduction projects in developing countries. CDM is an alternative to more expensive emission reductions in their own countries. CDM intends to provide incentives to cleaner technology projects and make them viable, which would otherwise not be implemented due to various barriers A crucial feature of a CDM project is that it has established that the planned reductions would not occur without the additional incentive provided by emission reductions credits, a concept known as "additionality.'' 2700 projects have been registered worldwide till date as CDM

Basic CDM Eligibility

Start Date

The construction of the project should have started after 01 Jan 2000. Project should start the CDM process parallel to the construction activity. Should intimate UNFCCC Project should result in reduction of any of the six GHG gases under the Kyoto Protocol

GHG Reduction

Voluntary

Project should not be implemented as a result of a policy or legal mandate (e.g.,: To meet pollution norms)

Basic CDM Eligibility

Additionality

In the normal scenario, the project would not be implemented due to technological risk or poor financial viability or other such barriers

CDM Consideration

The consideration of CDM revenue should make the project viable Proof of knowledge of CDM and the consideration of CDM revenue during decision making is important Project should contribute to the socio-economic, technological and environmental well being of the region either directly or indirectly

Sustainable development

Availing Carbon Credits

Carbon Credits General Thumb rules

1 MWh of electricity saved = 0.75 carbon credits approx. 1 MWh of renewable electricity generated = 0.75 carbon credits approx. 1 Tonne of fuel oil saved = 3 carbon credits approx. 1000 M3 of gas saved = 2.2 carbon credits approx. Minimum number of credits per project to cover CDM cost = 5000 carbon credits per year

Ecologikol's Role
Ecologikol helps organisations to go green with the following solutions :

Climate Change Impact Assessment and Strategy Identifying opportunities and risks for businesses

Estimation of Carbon Footprint and Facilitation for Carbon Certifications Green Factory Advisory Services Corporate Sustainability Reporting (As per GRI Standard) Carbon Credit Advisory Services Renewable Energy Services

ABOUT US
ECOLOGIKOL is the brain child of a group of energy and environmental experts with extensive and pioneering experience in the field of Climate Change, Energy and Sustainability. Our Professional team, gathered from leading Multi National Consulting organizations, have been associated with some of the first Climate Change and Green Factory projects in India and have many registrations subsequently to their credit. Our Professionals are experienced in successfully managing and executing more than 50 climate change projects across various sectors such as textiles, sugar, cement, paper, iron and steel, oil and gas, renewable energy, automobiles etc Our professionals have worked with projects for major Corporates in South India such as TNPL, Shri Renuga Textiles, Sree Santhosh Garments, EID Parry, Bannari Amman Sugars, Auro Mira, MSPL, Nippo, Aditya Birla etc.

Contact
ECOLOGIKOL Advisors India Pvt. Ltd. No.26/7, Abhirampuram First Street, Chennai - 600 018, India. Phone 1: +91-44 45534101| Email: contactus@ecologikol.com