Reliance Power Ltd., controlled by billionaire Anil Ambani, gained as much as 4.1 percent after the company said it may earn more than $400 million worth of carbon credits for an emission-reducing coal plant in India.
The stock climbed 1.8 percent to 133 rupees at 11:50 a.m. local time in Mumbai trading. The Bombay Stock Exchange’s benchmark Sensitive Index declined 1.1 percent.
The United Nations registered Reliance Power’s Sasan power project on Feb. 2 to earn as many as 22.5 million credits in the next 10 years, Chief Executive Officer J.P. Chalasani said late yesterday. The company expects to earn 20 billion rupees ($439 million) from selling those credits, he said.
The 4,000-megawatt Sasan project is eligible to earn credits because it will use advanced technology to lower coal consumption by 1 million tons a year, preventing 2.24 million tons of carbon dioxide annually from entering the atmosphere. One credit is issued for every metric ton of CO2 abated.
UN registration grants eligibility to earn credits. Getting credits requires an additional verification process to check a project is saving the amount of emissions it claims. Reliance Power doesn’t expect the first issuance of credits until after 2013, Chalasani said.
The UN Clean Development Mechanism, the world’s second- biggest greenhouse gas market, issues tradable credits to emission-busting projects in developing countries. CDM Watch, an environmental group, has criticized the system for subsidizing projects whose environmental benefits it says are dubious.
UN credits, known as Certified Emission Reductions, can be sold to countries and companies whose emissions are legally capped and need to offset their own pollution. A CER for delivery in December 2011 closed at 11.33 euros ($15.45) a metric ton yesterday in London on the ICE Futures Europe Exchange. Reliance Power expects to sell its credits for an average price of 15 euros each, Chalasani said.
