“the National Commodity and Derivatives Exchange Limited (NCDEX) announced in January 2023, its plan to launch a voluntary carbon trading platform. Clearly, we see that India is rapidly adopting market mechanisms for greenhouse gas reduction to accelerate its journey towards meeting its Net Zero goals.”
How serious are the movements in the carbon credits domain @tanay . I keep seeing multiple articles/posts but nothing clear. Can a cleantech company as of today, practically generate a stable revenue stream just based out of carbon credits?
@Pai @sameershisodia @NithinKamath do you see this voluntary stock exchange as a point where retail investors could empower the growth and development of cleantech companies in the country? Similar to the Social stock exchange that was discussed in the recent podcast
Recently came across this, so a voluntary market for orgs to offset footprint is not too far away - Press Information Bureau,
The government plans to develop the Indian Carbon Market (ICM) where a national framework will be established with an objective to decarbonise the Indian economy by pricing the Green House Gas (GHG) emission through trading of the Carbon Credit Certificates. Bureau of Energy Efficiency, Ministry of Power, along with Ministry of Environment, Forest & Climate Change are developing the Carbon Credit Trading Scheme for this purpose.
But with retail participation, I think time will tell if the idea sustains. There are several startups enabling this like Climes.
The Voluntary carbon credits market making mostly happens offline through large scale carbon traders & buyers. Big tech & Oil giants are big buyers and pay good dollar for high quality carbon credits.
In Indian context, we have been hearing different news such as the Emissions Trading scheme, the Voluntary Credits scheme or the Green Credits scheme. Right now, the proposals are at the very initial stages and will take some time to shape up. However, such political uncertainties get priced into the price of the carbon offsets. For example, when India announced a ban on export of carbon credits, the price for Indian origin carbon credits fell in international markets.
Regulations in this sector would actually help as it would help formalize the sector. Also, I think India would not ban export of carbon credits (for this decade atleast) as our own net zero goals are way ahead and carbon credits bring in substantial FDI. We may see us keeping a “quota” of credits for ourselves and exporting the rest. It will be interesting to see how this pans out.
Multiple clean-tech companies have based their revenue models entirely on carbon credits as it is a large market, growing with almost 100% in the last 2 years. (From $1B in 2021 to $2B in 2022)
In India, Varaha & Boomitra are some companies which business models based entirely on carbon credits from Nature Based Solutions. There are so many more, both in India & the globe.
