By Our RepresentativeIn an important development, a top international advocacy group, Carbon Market Watch (CMW), has welcomed the decision of EDF Trading, a major buyer of carbon credits from carbon offsetting projects around the world, to distance itself from the “controversial” Adani Mundra coal power project. The EDF Trading is a leading player in international energy markets and operates across all commodity lines, especially coal, which is the main requirement for the Adanis’ Mundra power project.
CMW, which is an extension of Clean Development Mechanism (CDM) Watch, an initiative of several international NGOs to provide an independent perspective on individual CDM projects and to critically assess the political decision-making process affecting wider carbon market developments, referring to the Sunita Narain committee report on environmental violations by Adanis in Mundra, said, the report, commissioned by the Indian Ministry of Environment and Forests, had “found violations and non-compliance with environmental conditions by Adani Group's Mundra Port.”
The CMW has said, now, the Government of India should “withdraw the CDM approval for the project”, adding, already, EDF Trading has in a statement published French energy daily “Enerpresse” stated that it “is no longer associated contractually under the CDM, with this [Adani Mundra] supercritical coal power project in India.” At the same time, the EDF Trading has sought to clarify that so far it has so far not done any carbon trading for the Adanis’ Mundra project.
The CMW underlines, “With coal-fired power is continuing to lose broad support even within the UN’s Clean Development Mechanism.” It adds, “The Adanis’ project is a new super-critical coal fired power plant at Mundra, Gujarat, India with an installed capacity of 1320 MW. It claims that it was built more efficiently because of the CDM offset revenue. Despite heavy criticism, the project was registered in 2009 under the UN’s offsetting mechanism. Because coal is inherently climate damaging and also causes numerous other environmental and human health impacts, NGOs have long been calling for the exclusion of coal power projects from the CDM.”
The CMW quotes its spokesperson Eva Filzmoser as saying,“Following the announcement from the British government to stop endorsing investments in coal power, this decision clearly underscores the controversial nature of awarding carbon credits to coal power plants. We welcome this move and call on parties to set a definite end for climate finance for coal power at the upcoming climate change conference in Warsaw”.
Filzmoser adds, “The statement by EDF Trading comes as a surprise because the company is listed as the beneficiary of the carbon credits from Adani’s Mundra project in an authorization letter issued by the French environment ministry. The Mundra project is also the first out of six registered projects that has already received carbon credits. Given EDF Trading’s statement that it has not purchased any of the credits it is unclear which entity has purchased the 600.000 carbon credits issued for the period February 2011 to March 2012.”
The CMW especially notes that the development has come close on the heels of the Ministry of Environment and Forests (MoEF), Government of India, “fining the Adani Group's Mundra Port and Special Economic Zone (components of the project area of which also the thermal power plant is part of) for damaging mangroves, creeks and the local environment at the project site. The fine was issued as a consequence of a report by an inspection committee set up by the MoEF that found that the Adani Group is in violation with various national regulations.”
Even then, CMW regrets, “The project remains registered as a CDM project until the Indian national authority withdraws their approval letter. This letter, that must approve that the CDM project contributes to sustainable development, is a fundamental requirement of the CDM.” Voicing a similar view, Falguni Joshi of the Gujarat Forum of the CDM has said, “Adani’s Mundra project not only harms the climate, it also threatens the health of local communities and fails to deliver sustainable development, as mandated by the CDM. We call on our government to take the findings of their report seriously and withdraw the letter of approval.”
The Clean Development Mechanism (CDM) a market-based mechanism established under the Kyoto Protocol as a means of allowing the industrialized countries to meet their national targets by investing in lower cost carbon emission reduction projects in developing countries. While the CDM operates under the oversight of the Conference of the Parties (COP/MOP) of the United Nations Framework Convention on Climate Change (UNFCCC) and proclaimed as a "trailblazer", it has been criticized by some environmental and other non-governmental organizations as ineffective and counter-productive.