Samrat Sengupta is Climate & Renewable energy professional and policy campaigner, with two and half decades of experience, with proficiency in the carbon market & renewable power business strategy & development. At EKI Energy Services Limited, he is responsible for new business-line development in the climate change vertical. Smart Energy team speaks with Mr Sengupta about Carbon credits and their importance in our collective journey to a more sustainable and nature-positive future.
Q. Can you tell our readers what is climate ambition and how is EKI Energy Services helping businesses and organizations to achieve their climate ambition?
Everybody is aware of the problem of climate change and global warming; it is all over the media.
Scientifically if we have to restrict our global warming to 1.5 degrees by the end of this century, the globe as a whole needs to attain a net zero emission level by 2050. Net Zero emission level means whatever greenhouse gas emission happening in the atmosphere due to human activities should be net off by the absorption capacity of the environment, primarily in forests, soils, oceans etc. Our human-induced emissions should be limited to that capacity so that the overall carbon content in the atmosphere should not further increase beyond 2050. Only then, by end of this century, we have a higher probability to limit the temperature change within 1.5 degrees.
We, EKI Energy Services Limited, a BSE-listed service provider of carbon asset management, provide consultancy/advisory services to corporate and facilitate them with knowledge on how to define their carbon footprint, how to address their plan of carbon neutrality through their own in-house measures and how to offset their residual emission by investing in high-value carbon credits. We are one of the largest players in the global market who source quality carbon credits for the corporate to use for their offsetting purpose.
Q. In the decade long journey what are the clients and major projects that EKI Energy Services has worked on?
We started our operations in 2008.Our first project was registration of a voluntary carbon standard project. In our almost one-and-a-half decade-long journey, we have worked with 3500+ clientele, originating from 40 different countries and have traded 200+ million of carbon offset globally. Almost all the big companies including the multilateral and bilateral agencies like World Bank, ADB, etc are on our client list.
Q. Can you share some light on climate change and the transition to Net Zero vis-a-vis increase in business and profit for an organization or a company?
Investment in businesses comes with profitability understanding. The profitability estimation in an activity is highly dependent on risk assessment of the outputs. Climate change / global warming is severely enhancing the risk factor of investments, and an effective way to address climate change mitigation is required to lower the risk and assure returns. So, internalization of climate-friendly approach through attributing ESG parameters in investment decision making become obvious in today’s world. It results in organizations or companies taking net-zero and carbon neutrality seriously in overall business planning.
The basic problem of what the world is experiencing today in various sectors of the environment including climate change is because the industrial revolution and related development models are not designed to internalize the cost of natural resources being extracted from mother earth; which has enhanced huge unsustainable consumption. This consumption-centric development model is the main problem point where the environmental and social cost has not been internalized in their financial parameters.
Carbon Market is possibly the first step towards internalizing the cost of the environment into a business aspect and also in a way that it reduces the risks related to that investment, which has been appreciated by the corporate world and particularly the investment community internalizing the environmental, social governance issues as one of the major criteria in their risk assessment and valuation before investing in any kind of projects, program or business activities.
A proactive climate corporate will reduce their future risk of businesses, will give an enhanced bottom line to them as well as address the environmental footprint or reduce their environmental footprint.
This is happening because both the investor community and the customers are getting more and more sensitized about it and they prefer a business entity that works for delivering any product or service with the minimum possible environmental footprint. Climate change or investment towards climate change is not considered a cost in present-day business, it is considered risk minimization and long-term business profitability.
Q. Can you tell us more about what actually carbon credits are and how they can help businesses?
The greenhouse gases which are broadly categorized as carbon emissions, because carbon dioxide consists of the maximum portion of the human-induced greenhouse gas emission, have a very long atmospheric lifetime. When carbon dioxide gets emitted into the atmosphere, its residual time is more than 100 years. Anywhere on this earth, if an emission happens, it automatically disperses uniformly and has a more or less equivalent effect everywhere. Reduction of emissions happening in any part of the globe will benefit the globe as a whole. Therefore, emission reduction is utmost for the survival of species, flora and fauna including mankind on this earth.
The marginal cost of saving the emission or avoiding the emission is very important. A dollar spent anywhere in the world will not address an equal amount of emission reduction, it may address a substantial emission reduction in the South, but it may not address a very substantial emission reduction in the North. This has created a trading mechanism, where a high-cost economy will invest in a low-cost economy to help them grow sustainably and avoid undue emissions that may happen and trade those emission reductions in lieu of finance for their own goal to get to the net zero.
Suppose I run a company that has its own operational and business emission. I will try to reduce it through our internal procedural improvement, but whatever the residual emission which cannot be addressed technically or process-wise I will invest in an emission absorption project in any part of this globe, which will address the absorption of greenhouse gases or absorption of carbon dioxide through nature-based solutions, community-driven energy access program or renewable energy program.
Q. Can you tell our listeners more about EKI’s climate edtech and climate finance marketplace joint venture with First Source Energy India Pvt. Ltd?
Nowadays IT and IoT-based online activity has helped in building up capacities. Any person sitting in any part of the globe can take the help of IT and do any kind of capacity development activity. Our Edtech JV with First Source Energy is primarily looking to build up capacities among young professionals, particularly in the field of environmental sustainability and climate change and develop a huge talent pool that the world at this moment requires to support activism, support various actions the world need to take in a very short time to make all businesses, all operations, all human activities sustainable, carbon neutral and can help in addressing the net zero or 1.5-degree Centigrade goal as said by IPCC.
Q. Your views on the Energy Conservation Amendment Bill 2022?
The Energy Conservation Amendment Bill has been passed by the upper house of the Rajya Sabha in December 2022 enabling the act to be in place. It was passed by the Lok Sabha last year in June. It gives space for regulators to form the regulation policy as well as the regulation to make India’s national emission trading system, the cap and trade emission trading system in place. Under the Ministry of power, the Bureau of Energy Efficiency is working on it for almost last six months and we expect, by April 2023 the initial structure and the policy will be publicly disclosed by the government. It will help to develop a national emission trading system where the present form of energy efficiency trading and renewable energy trading will be merged together and there will be a single entity that will be entitled to trade the carbon credit certificates. There will be a target given to designate consumers and based on their performance, their achievement of the targets, if anybody falls short of the target, they can purchase credit from somebody whose performance has exceeded the target.
This will help the country to achieve its NDC commitment, which is the primary objective of the CTS as well as help create a huge sense of climate awareness among the various business entities, making them proactive climate ready and help them in future business competitiveness also. In the era of globalization, when India is poised to be a manufacturing hub of the globe, there will be a lot of check and balance on the emission footprint of the product or services that will be produced by various business houses and this kind of national emission trading system will help them to adopt carbon friendly or emission friendly technologies well before time and make them competitive in the global business arena.
Q. Can you tell us more about EKI’s community-based projects and the recent capacity expansion at its manufacturing plant located in Nashik in Maharashtra?
India has a huge challenge of providing the basic level of energy access to all of its population, including the population living in remote parts of the country or economically deprived sections of the community, as well as addressing emission reduction. Our per capita emission and per capita energy consumption both is one of the lowest in G20 and it is almost one-third or one-fifth of the world average.
Though we have a substantial space to grow our emissions, we should not do it unsustainably, we should do it with the utilization of local resources and in a carbon-friendly manner. Considering the same the EKI’s community-based projects businesses have been designed to give efficient cooking devices, efficient water filtering devices, and efficient lighting devices to the targeted Community almost free of cost. We justify the investment towards it by acquiring the carbon emission reduction and bringing carbon finance instead of those emission reductions. This is a unique business concept, where the community gets benefited through sustainable energy access which has a lot of co-benefits associated with it. It gives support to their livelihood operation while delivering significant benefits to women’s community because in most of rural areas, women folks walk long distances dailyfor firewood collection or portable water collection. Through our community based projects, these womenwill get much more time for productive operations or productive activities which will give them an economic benefit as well as addresses the health issue.
When there will be sustainable energy used particularly in small houses in the form of cooking or lighting there will be very less emissions compared to the standard practices. It will address the in-house pollution and various health issues related mainly to women and children.That’s quite substantial co-benefits associated with it and it is happening without any investment through a process of channelizing the carbon finance into the activity.
We have developed our manufacturing capacity with almost 5 million per year manufacturing facility of cookstoves in our Nashik facilities and this is possibly the largest manufacturing capacity any organization or company or entity has in any part of the world. We are very active in India and we are expanding our activity in various parts of Africa and other South Asian and East Asian countries. This is one of our flagship programs which addresses the environment, community and also business.
Q. How important is technology and its role in tackling climate change?
Technology is very important because without technological growth or R&D in technology, addressing sustainable development will not be possible. Particularly I can refer to the upcoming green hydrogen economy or CCU & CCUS, which is still in laboratories but it has the possibility of getting a good amount of interest among the business communities.
We should concentrate more on technologies that will facilitate easy recyclability so that the virgin material requirement can be reduced to an optimum level, that’s very important even for the storage technology which is the backbone of our renewable energy integration in the grid. When we think about storage, immediately our mind goes to battery, but there is various other storage which is conventional storage. India has a huge amount of hydropower capacity, with a little intervention hydropower can be augmented in a pump storage capacity. We should think about utilizing more and more indigenous technologies because the present battery technology is lithium-ion technology which is based on two basic materials Lithium and Cobalt. None of it has any source within India, nor is the production facility in India. So, more and more technological development like Aluminium Air or Vanadium Flow technology will help somehow address the energy security of our country.
Q. Can you share your vision for EKI Energy Services in India and the role it will play in the energy transition to Net Zero?
EKI is a leading professional services firm that specializes in the realm of “climate change, carbon credit and sustainability solutions” across the globe. We enable organizations to shape their climate action with an aim to building a better world and rehabilitating Earth to a low-carbon future with a climate-resilient global economy for our clients, our people and our communities. We have an internal target to become net-zero by 2030, in addition to mobilizing 1 billion carbon credits by 2027. Our services are targeted at steering the transition to a net-zero future by helping businesses, organizations and individuals across the globe with expert advisory and consultancy services in carbon asset management.
We have been leading the race in global decarbonization through market-based instruments and end-to-end climate-positive, community-based projects and nature-based solutions. To achieve our goal of a sustainable future, we continue to collaborate with leading brands in the domain of technology and others to enhance our services, facilitate our clients with the latest technology and ultimately expedite the journey towards a net-zero future. We are committed to inspiring communities and organizations to minimize their carbon footprint. At EKI, we believe in leading by example and therefore have incorporated a sustainability mindset across all our processes.
Our team of climate enthusiasts is present in 16 countries and serving 3500+ clients across 40+ countries. We have mobilized 200+ million offsets to date and are on the right path to fulfilling our aim of mobilizing 1 billion credits by 2070. The ultimate goal is a net-zero future and we continue to fast stride towards our goal.