In India so far, 242 projects have been identified for generating CERs while a total of 318 projects have received clearance by the Ministry of Forestry and Environment. For the Indian carbon market — which has the potential to supply 30-50% of the projected global market of 700 million CERs by 2012 — the low prices have resulted in hoarding of credits, in the expectation that prices would rise in the future.

As general manager of Maharashtra Energy Development Authority (MEDA), S.R. Choudhary says, “Our 3.7 MW wind energy project in Satara has been allocated 8,000 credits per annum and so far we have already sold 20,000 credits. But that was four months back, when the prices were much higher. At the current rate, we would much rather hold on to our credits and sell them in the future, when the returns are more attractive.’’

Meanwhile, the industry is expecting the ruling price line (12 to 16 euros) to stay and even dip in the future. “Moreover, the absence of international transaction laws and proper regulatory mechanisms in India can also be a deterrent as far as sales of CERs from India go,” feels Nahar, who says that India has contributed barely 30 million CERs of the 2 billion credits traded globally so far.

But every bear phase is followed by a bull run and the global carbon credit market is likely to stabilise once the commitiment period of 2008 approaches.