Creduce, one of India’s leading services providers in the field of climate change and carbon asset management, plans to set up a digital registry to help small and marginal farmers claim carbon credits, its founder Shailendra Singh Rao has said. “We are coming up with the world’s first ever microscale agriculture and agroforestry-based carbon credits registry soon. This will benefit marginal class farmers and bring them into the mainstream carbon credits market,” he told businessline in an online interaction.
Right now, if a farmer wants to claim carbon credits, his farm area should be at least 1,500 hectares to make the project financially viable. This is because it takes ₹15-20 lakh for an agriculture-based carbon credit project activity to claim the credits.
Unique biz model
“Marginal farmers cannot bear the cost of claiming carbon credits. They are still untouched by this. So, we decided to build a product which can bring these farmers, who make up 95 per cent of the Indian farming community, into the mainstream of the carbon market at zero cost,” said Rao.
Creduce has designed a unique business model in which a farmer has to be onboarded and his activities will be recognised on the company’s platform. “Farmers will be awarded carbon credits for free and these credits can be traded on our integrated marketplace, “ the company’s founder said.
The money that a farmer earns through such a trade will directly be credited into the farmer’s account through the direct beneficiary transfer model. “So, even if it is ₹500 or ₹1,000 it would be an extra income for the farmer,” Rao said, adding that the registry will have “zero human intervention”.
Welcome policy interventions
Creduce, launched in 2012 and rebranded in 2020, has made a soft launch of the registry and trial runs are on to test the platform through demo projects. “The registry is due to be launched publicly during the UN Climate change conference or COP28 scheduled to be held during November 30-December 12,” he said.
To a question, Rao said Creduce, which means carbon reduce, is not looking to partner with the Government for this. “The carbon market is all about sentiments. Whenever there is anything related to the government role or intervention, the market goes down. We have seen in the past,” the company’s founder said.
However, Creduce would welcome any policy intervention by the government as it would help farmers, Rao said. Farmers will be onboarded on the registry individually and the company is partnering with self-help groups, micro-finance groups and farmer producer organisations (FPOs).
These groups have control over a large number of farmers and they can bring in a good number of growers to the carbon market platform.
Projects with States
Creduce is an active alliance partner of the several State governments in carbon credit projects. “We are developing multiple State government projects for procuring carbon credits,” said Rao, who has been in this sector since the clean development mechanism (CDM) was launched in 2006.
Creduce has signed a contract with the Arunachal Pradesh government to develop bamboo resources on community land covering one lakh hectares. The project will likely fetch $80 million worth of carbon credits over the next 15 years for the State.
The company has also signed five lakh hectares for “red plus” forestation-based carbon credit activity with Mizoram. Recently, the carbon credit firm finalised 10 lakh hectares “red plus” forestation activity with the Assam government. “We are doing about 10,000 hectares of afforestation/reforestation based rubber plantation activity in Kerala,” Rao said.
‘Red plus’ forestation
“Red plus” forestation refers to reckless activities that damage existing forest lands that have carbon stock which would have to be accounted for and claimed. “Such a process can help to preserve these forests using the carbon credits money garnered from its existing carbon stocks,” he said.
Creduce is also working with Maharashtra, Gujarat, Nagaland, Himachal Pradesh, Uttarakhand governments. “We are on the verge of finalising our MoU with Telangana, Andhra, Tamil Nadu and Assam. The company is also involved in doing projects with PSUs with the Sutlej Nigam Limited being its biggest clients receiving 47 million carbon credits. It has also dealt with Delhi Metro Corporation and NTPC.
It is in talks with Madhya Pradesh for a “red plus” forest project. Creduce is also into sustainable agriculture-based products as well. “We are developing carbon credits on sustainable rice cultivation. We are developing carbon credits for sustainable sugarcane cultivation in Gujarat and Maharashtra.
REC trading
Rao said Creduce has served on more than 14 gigawatts of renewable energy projects. “We are developing about 5 million hectares of forestry projects in India. We are also active in the agricultural-based carbon credit space. We are one of the frontrunners for the leading space in international renewable energy certificate (REC) trading in India,” he said.
The company is active in the space of blockchain too. “We are actively trading carbon credits across all projects such as nature-based solutions, renewable energy or waste management. We are a leading name in this sector and space,” he said.
The carbon market has revived since the Covid pandemic with the governments raising concerns over global warming and climate change after having crashed in 2015-16. It was then that Creduce rebranded itself and gathered pace over the past three years.
Since then, Creduce has developed 14 gigawatt of renewable energy projects, traded about 20 million carbon credits and international RECs in the sector. “We hold about 55 million carbon credits, the largest portfolio of carbon credits and built a pipeline of nearly 20 million carbon credits generation every year,” Rao, who became an entrepreneur to tap the network he had while dealing in CDM.
Carbon credits trade
According to him, there are two types of credits. One is removal and the other is replacement credit. “The first one is the elimination of carbon dioxide from the environment and the other is how much of the carbon emission would have taken place in the absence of a particular activity.
“These projects directly replace carbon emission from coal plants. We do these reverse calculations based on the registries. We do reporting, structuring and documentation as per the registry’s requirements and submit it to the third-party external auditors, who do a thorough audit before awarding carbon credit,” Rao said.
Creduce also deals with afforestation, which is basically rendering barren lands green or developing forests on such lands. There is also reforestation where new trees are planted on land where forests had existed previously, the founder said.
According to Rao, as per 2021 data, 200 million plus carbon credits were traded globally with trading from India accounting for 30 per cent. “India is a major beneficiary,” he said.
On the funding of the company, the founder said last year, it had opened a $20 million dollar A series funding. The company got some good commitments and the funding is on the verge of closure. “The industry might get good news very soon,” he said.
To a question, Rao said Creduce was focussing on its core activities but it is open to consider diversifying its portfolio into other spaces “as per changes in the economy”.