Companies using India?s coasts to transport goods between domestic ports can soon start claiming carbon credit as shipping ministry, in collaboration with its environment and commerce counterparts, is framing a mechanism to enable firms know how much carbon emission they have prevented and receive the monetary benefits for that.
This is the first time that the government is linking shipping sector with carbon credits. It is one of the measures through which the shipping ministry wants to promote coastal shipping, which accounts for only 6% of the total domestic cargo movement even though the country has more than 7,500-km coastline and over 200 ports. In Europe, coastal shipping has a 40% share in total cargo moved.
?Use of waterways is cost effective and most environment-friendly mode of transport but it is difficult to attract customers. We are working on a policy to promote coastal shipping. One part of the policy is to make carbon credit feasible. The technicality of the situation is to whom the benefit should go? Our thinking is that it should go to the users of the waterways,? shipping secretary K Mohandas told FE. Waterways are considered cheaper mode of transport as it results in up to 40% saving when compared to roadways.
The ministry has given a time of two months to Directorate General of Shipping (DG Shipping) to form the policy. In turn, DG Shipping has involved Indian Coastal Conference?the lobby of coastal ship operators, major and minor ports and coastal states.
?I think within this time we will be able to put the policy in public domain even as discussions continue at the departmental level,? Director General of Shipping Satish B Agnihotri told FE from Mumbai over telephone. ?I am going to announce the preparation of the policy at a conference organised by Indian Coastal conference on November 16,? Agnihotri said. Justifying the involvement of commerce ministry, he said that earning carbon credit entitles the company to claim export benefits as it earns foreign exchange for the country.
Carbon credit is only one part of the proposed policy. DG Shipping is also looking for ways to provide suitable infrastructure at all ports as well as fine-tune rules related to manpower. Mohandas said the issue of showcasing waterways as a better mode of transport may also be taken up by National Transport Development Policy Committee headed by Reserve Bank of India?s former deputy governor Rakesh Mohan.
A carbon credit is nothing but a tradable certificate or permit representing the right to emit one tonne of carbon dioxide or carbon dioxide equivalent. They are integral to national and international attempts to mitigate the growth in concentrations of greenhouse gases (GHGs).