To contain the scourge of global warming, the UN introduced a system in 2005 that awarded carbon credits to companies that reduced emissions in the developing world. It was a sort of compensation to manufacturers who were also allowed to sell accumulated credits on global trading markets.
But, it came to notice that some producers of coolant gases, used in refrigerators and air conditioners, were actually emitting more waste gas due to the fact that currently it actually pays more to destroy such waste gas than make efforts to curb its emission.
Waking up to the malpractice, the EU has announced non-acceptance of waste gas credit points next year onwards and the UN is taking measures to stop the entry of new into the business. The UN also announced that companies could now claim only 1 per cent of their coolant production (earlier at 3 per cent), thereby, reducing the number of credits coolant companies can collect in the future.
In India, Gujarat Fluorochemicals Limited (GFL) has, over the years, earned a significant amount of revenue through sale of carbon credits in the global market. During FY12, GFL posted revenues of around Rs 2,830 crore, of which carbon credit revenue was around Rs 876 crore (31 per cent). Although the company has witnessed a fall in its carbon credit revenue over the years, it still forms a significant part of its total revenue (an average of 40 per cent). Banks and companies holding such credits are already in a rush to cash/sell them. With new regulations coming in place, chances are that GFL’s revenue and profits might take a hit.
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
