(BN) Gujarat Rises to 3-Year High on Carbon Credits Award (Update1)


Gujarat Rises to 3-Year High on Carbon Credits Award (Update1)
2011-01-18 13:34:01.443 GMT

(Updates with closing share gain in second paragraph.)

By Natalie Obiko Pearson
Jan. 18 (Bloomberg) -- Gujarat Flourochemicals Ltd., an
Indian maker of refrigerant gases, rose to a three-year high
after winning carbon credits for the first time since the United
Nations ended a probe into projects claiming emission reductions
of industrial gases.
The shares gained 4.5 percent to 263.95 rupees in Mumbai
trading, its highest close since February 2008. The benchmark
Sensitive Index advanced 1.1 percent.
The UN Clean Development Mechanism said on its website that
it awarded 2.4 million credits to the company for preventing its
plant in Ranjitnagar in Gujarat state from venting
hydrofluorocarbon-23, or HFC-23, a by-product of refrigerant
production and potent greenhouse gas, into the air.
The price of one UN credit, known as a Certified Emission
Reduction, for delivery in December 2011 closed at 11.10 euros
($14.75) a metric ton on the ICE Futures Europe Exchange in
London yesterday.
The issuance ended an 11-month period in which Gujarat
Flourochemicals didn't receive any new credits amid a UN review
of HFC projects after the environmental group CDM Watch said
some companies may be increasing HCFC-22 output simply to
generate credits. Gujarat Flourochemicals last won 1.7 million
credits on Feb. 16, according to Bloomberg data.

Comply With Limits

Such credits are bought by companies and nations to comply
with limits on emissions of greenhouse gases. While HFC-23
projects represent less than 1 percent of all registered CDM
projects, their credits account for more than half the tradable
offsets issued so far by the UN. The 19 projects cutting the gas
under the CDM program are mainly in China and India.
The European Union, home to the world's biggest emissions
trading market and a major buyer of credits, has proposed a ban
on credits from HFC-23 projects starting in 2013, saying such
credits may undermine the integrity of the UN greenhouse gas
"We're not discussing whether to do this but when to do
this," EU Climate Chief Connie Hedegaard told a hearing in the
European Parliament in Brussels last week.

For Related News and Information:
Link to Company News: NFIL IN <Equity> CN <GO>
Emission market news: NI ENVMARKET <GO>
India energy stories: TNI NRG INDIA <GO>

--Editors: Baldave Singh, Peter Langan, Randall Hackley

To contact the reporter on this story:
Natalie Obiko Pearson in Mumbai at +91-22-6120-3650 or

To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or landberg@bloomberg.net.