The Foreign and Commonwealth Office of United Kingdom has funded a major capacity building project for Clean Development Mechanism (CDM) for Indian chemicals and fertilizers industry. The U K government has entrusted Eco Securities, a leading UK climate change consultancy, to implement the project by helping Indian industry to switch over to CDM.

All upcoming projects in the chemicals and fertilizers sector including bulk drug pharmaceuticals can benefit from their investments on eco-friendly process technologies through the new project. The same is applicable to all modernization / expansion projects of existing companies if the outcome is reduced carbon emission. The chemical and pharmaceutical zones, like the Pharma City planned at Vizag in Andhra Pradesh can avail substantial financial support from global carbon agencies, if the promoters can plan the projects according to the emission requirements of CDM.

The India-focused CDM project, launched in New Delhi on October 7, focuses on how the CDM can be accessed by Indian industry and how carbon credits can affect project financing. The project is funded and supported by the Foreign and Commonwealth Office's Global Opportunities Fund (GOF).

CDM is a new revenue model that emerged after the Kyoto Protocol, which calls for a commitment from the industrialized countries to reduce Green House Gas (read carbon) emissions by an average of 5.2 % below 1990 levels by 2008 to 2012. Kyoto Protocol established a "flexible mechanism" to meet this objective, where international emissions trading between countries on a scale of one tonne of CO2: one tradable unit was agreed. This means, the pollution reduction achieved by the developing countries that are out of the list of targeted countries can be traded for money. The CDM allows for banking of emissions reductions from the year 2000.

Eco Securities will try to enable Indian industries to identify CDM projects through a supported process of project screening. It will also assist the industry remove potential barriers to project development by bringing a number of key stakeholders - including those from finance, service provision sectors and the government. The agency is to meet pharmaceutical industry leaders in Mumbai, it is learnt.

EcoSecurities, on its part is organizing workshops to assist Indian companies identify and develop financially viable CDM projects. This will enable Indian industry to benefit from financing opportunities under this new mechanism. All workshops would be over within five months and the agency will try to build up confidence in all stakeholders, says Justin Guest, Projects Manager, EcoSecuritites. He informed that the process would culminate with Project Idea Notes being presented to potential carbon buyers at an event in early 2004.