MUMBAI: Global warming due to greenhouse gases has opened a new avenue for Indian companies. The savvy can use it to make more money than their annual turnover.
A recent sale of carbon credits by Gujarat Flurochemicals (known for Inox multiplexes) has created waves in Europe and Japan, where companies are desperate to reduce carbon emissions at their factories.
Low-profile Gujarat Flurochemicals, which runs the largest refrigerant plant in India, has agreed to sell carbon credits worth Rs 1,000 crore over the next three years to Noble Carbon Credits of Singapore. The deal will rake in Rs 350 crore for GFL in the first year, sources said. The windfall is nearly double the company's sales of Rs 182 crore last year and more than thrice its net profit of Rs 96 crore.
An international pact, known as the Kyoto Protocol, has set emission caps for developed countries for 2008-2012. The agreement has been signed by 141 countries, notable refusals being US and Australia. Companies in these countries can either reduce greenhouse emissions to mandated levels or offset actual emissions by buying carbon credits from companies in developing countries that manage to reduce carbon dioxide levels.
GFL has promised to sell half of the carbon credits to Noble until 2012 at a minimum price of $10 a unit. It can buy up to 35% at the market price with a floor of $10 a unit. GFL will be free to sell the rest in the spot market.
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