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Carbon Credit Advisory

Carbon Credit Advisory

A carbon credit is a permit or certificate allowing the holder, such as a company, to emit carbon dioxide or other greenhouse gases. The credit limits the emission to a mass equal to one ton of carbon dioxide. The ultimate goal of carbon credit is to reduce the emission of greenhouse gases into the atmosphere.

A carbon credit is fundamentally a permit-issued by a government or other regulatory body-that allows its holder to burn a specified amount of hydrocarbon fuel over a specified period. Each carbon credit is valued against one ton of hydrocarbon fuel. Companies or nations are allotted a certain number of credits and may trade them to help balance total worldwide emissions. "Since carbon dioxide is the principal greenhouse gas", the United Nations notes, "people speak simply of trading in carbon."

The United Nations' Intergovernmental Panel on Climate Change (IPCC) developed a carbon credit proposal as a market-oriented mechanism to slow worldwide carbon emissions. A 1997 agreement known as the Kyoto Protocol set binding emission reduction targets for the countries that signed it, set to go into force in 2005. Another agreement, known as the Marrakesh Accords, spelled out the rules for how the system was to be implemented. One mechanism through which countries were encouraged to meet their targets as emissions trading.

The Kyoto Protocol divided countries into industrialized and developing economies.

Industrialized-or Annex 1-countries operated in their own emissions trading market. If a country emitted less than its target amount of hydrocarbons, it could sell its surplus credits to countries that did not achieve its Kyoto level goals, through an Emission Reduction Purchase Agreement (ERPA).

The separate Clean Development Mechanism for developing countries issued carbon credits called a Certified Emission Reduction (CER). A developing nation could receive these credits for supporting sustainable development initiatives. The trading of CERs took place in a separate market.

Carbon Trading in India

Indian industries were able to cash in on the sudden boom in the carbon market making it a preferred location for carbon credit buyers. It is expected that India will gain at least $5 billion to $10 billion from carbon trading (Rs 22,500 crore to Rs 45,000 crore) over a period of time. Also, India is one of the largest beneficiaries of the total world carbon trade through the Clean Development Mechanism claiming about 31 percent (CDM).

India's carbon market is one of the fastest-growing markets in the world and has already generated approximately 30 million carbon credits, the second-highest transacted volumes in the world. The carbon trading market in India is growing faster than even information technology, biotechnology, and BPO sectors. Nearly 850 projects with an investment of Rs 650,000 million are in the pipeline. Carbon is also now being traded on India's Multi Commodity Exchange. It is the first exchange in Asia to trade carbon credits

Value Added Tax on Carbon Credit

The government of Delhi in a notification has declared that the Certified Emission Reductions (or 'Carbon Credits' as we know) are to be considered as goods and thus their sale is liable to value-added tax in the State. The Commissioner of Trade and Taxes has declared that the nature and aspects of Carbon credits have to be examined and tested against the definition of goods to arrive at the conclusion that carbon credits are no different from ordinary commodities bought and sold in the market and thus a sale transaction of carbon credit would attract value-added tax on sale.Why Sachin Ranbhise & Associates for carbon credit advisory services in Pune?

Sachin Ranbhise & Associates is abreast of the rules and regulations related to the issuance of carbon credits. SRA keeps a keen eye on the latest market changes with regard to carbon credit. The team is highly proficient in the procedure of obtaining the permit. The team ensures smooth sailing throughout the process.

Our knowledge and expertise in the field make us the best Carbon Credit Advisory service provider in Pune. We provide our services to Indian corporates, multinational corporates, new start-ups and individuals with high net-worth.