New HOT Sector............Carbon Credit.......

Carbon credits offer us a Rs 28,000-cr opportunity

LESLIE D’MONTE New Delhi, 10 December
The Indian government has approved more than 1,400 projects as part of the Clean Development Mechanism (CDM) that could attract around $6 billion(Rs 28,000 crore) into the country by 2012 through sale of Certified Emission Reduction (CER) certificates, according to Environment and Forests minister Jairam Ramesh.

The National CDM Authority (NCDMA) in India has accorded Host Country Approval to 1,455 projects. These projects have seen an investment of more than $33.7 billion(Rs 1.6 lakh crore). If all these projects get registered at the CDM executive board, it will earn developers over 600 million CERs by 2012. At aconservative price of $10 per CER, the figure works out to a little over $6 billion.

“This is the potential foreign direct investment (FDI) that India stands to earn from carbon credits. In fact, 10 per cent of India’s annual greenhouse gas (GHG) emissions can be neutralised because of this,” Ramesh told Business Standard ,adding: “India may be the second-largest country in terms of the number of CDM projects (after China) but is the best in terms of implementing them.” Carbon-efficient projects in India, China, and other developing nations, however, are facing uncertainty over the new compliance rules post 2012 since the Copenhagen Agreement is expected to establish a new sectoral carbon market-crediting mechanism with focus on the Clean Development Mechanism (CDM) in less developed countries (LDCs).

In fact, despite the promise that carbon credits hold, the number of Indian carbon offset projects proposals submitted every day to India’s national authority — that is, CDM India — has reduced approximately by 30 per cent, according to Mayank Batra, Research Analyst (Environment and Building Technologies), South Asia & Middle East, Frost & Sullivan.

Carbon credits are a key component of national and international attempts to mitigate the growth in concentrations of GHGs. One Carbon Credit is equal to a tonne of carbon. Carbon trading is an application of an emissions trading approach. There are two broad methods of earning carbon credits. Carbon Offset Credits, which consist of clean forms of energy production, wind, solar, hydro and biofuels. And Carbon Reduction Credits which comprise the collection and storage of carbon from the atmosphere through biosequestration (reforestation, forestation), ocean and soil collection and storage efforts.

“Project-financing activity has also declined, as people are looking at Copenhagen for future developments and buyers are not willing to enter into deals that have post-2012 delivery,” says Batra.

Asia is the leading supplier of CERs in the global carbon market, holding approximately 77 per cent of the share. Over 3,714 projects are developed under CDM all over Asia. Most of these are the future-installed power projects, which will have a capacity of around 58 Gw in hydro, wind, biomass, geothermal, biogas, landfill gas, solar, tidal, energy efficiency-based own generation, and coal bed/coal mine methane sectors.

India, on its part, has generated around 30 million carbon credits, and approximately 140 million are in pipeline. Around 225 Indian projects in the fields of biomass, cogeneration, hydropower, and wind power with a potential of 225 million CERs have been registered. Carbon offsets from solid waste projects, too, will see a rise. At present, the Indian solid waste management market is witnessing tremendous growth. Currently it is valued at around $155.56 million (Rs 728 crore) and is expected to grow at a rate of around 20 to 25 per cent in the next three to five years.

My Comments:

With China already annoucing the Carbon emmision cut and Obama emphasizing on clean environment ,clean energy sector will have a run and there is where Solar sector play will also come.....

I have been writing on Carbon Credit since long.I have been bullish on this sector since 2-3 yrs as if one will go by my posting at MMB and at other places then they can see that Navin Flourine was recomended way back in 2006-2007.

Now when the sector is coming to the fore, carbon credit stories will start coming up.One other share which I have recomended is Sahyadri Ind and that was also way back in 2007.Sahyadri is also gaining from CC.

There were some other stocks which I have written here but not discussed in detail like Alufluoride Ltd,IFB Agro,Tanfac etc......these are all stocks where CC story is coming up.Torrent Power which was recomended below 100 and is now over 300 means return of over 300% within a year is also gaining from CC.

I remember I gave a call on Kalyani Forge around 80 and it has almost doubled.In the same post I recomended Tinplate and it gave a right @ 45 and it is now XR and price is 62.The recomended price was around 45.

Saw yesterday that PAE, APW President,LT Foods etc were in 20% upper circuit.Ennore Coke is moving nicely and looks still promising.

There are laggards as well, like PSL,Apar,Srie Infra,etc but they will run when their time will come.

Happy to note that KPIT Cummins is in for run and so is Venus Remedies.

Heidleberg Cement,Prism Cement are 2 cements stocks which I have recomended and needs to be keep watch on.One can buy in small quantity and buy more on dips.

Kale Consultancy is looking good still and one can still take exposer here.I once recomended Indsil Hydro as well some couple of months back and is looking promising as well.

When my picks runs and people makes money I feel very happy that someone is earning from my picks.I hope readers must be benifitting from my picks .....I have tried my level best to write here with all the constrainst I have .Believe me it takes lots of my time to go through all these and coming out with a stock to recomend.Filtering all that needs to taken in account and ignoring what needs to be is a very big task.

Read my replies too....one can get something out of it always......

When readers read a recomendation here it is the precipitation of all my hard work ....that comes after so much of due diligence on my end and some times I may err .After all I am a humanbeing ...