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Gujarat launches pilot of unique emission trading scheme

FE Bureau
emission trading scheme, Emission Trading Scheme, ETS-PM, Gujarat government, GPCB, Vibrant Gujarat Summit

With an aim to curb air pollution, the Gujarat government on Wednesday launched a pilot of the Emission Trading Scheme for Particulate Matter (ETS-PM) to mark the World Environment Day. Under this first-of-its-kind project in the world, a selected industry cluster in Surat region will be allotted permits by the Gujarat Pollution Control Board (GPCB) for particulate matter (PM) emissions in terms of mass, said Rajiv Gupta, state additional chief secretary for environment and forest. These permits, in zero net supply, will therefore limit the total quantum of PM emission from these industries.

Gupta, who is also the chairman of the GPCB, said the industries would use the trading platform to trade with one another for settling their allotted emission permit balance. The industries emitting lower than the permitted emissions will have permits to sell, whereas those emitting higher than the permitted emissions will buy the permits from other units. The trading market of PM emissions would be similar in nature to the trade in commodities. Here, through the trading scheme, the buyer industry will pay charges for exceeding permitted emission limit, while the seller industry will be rewarded for having reduced emissions.

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As ETS-PM is a pilot, the GPCB would notify the selected industries and the scheme would be introduced in a phased manner, Gupta said. The scheme wouldn’t change or remove any existing legal and regulatory requirement for industries to meet the prescribed concentration standards for particulate emissions. The traded commodity under the scheme will be kilogram mass of particulate emissions as measured by the continuous emissions monitoring system.

For this ambitious project, the GPCB and the state environment department entered into a memorandum of understanding with J-PAL South Asia at IFMR and The University of Chicago Trust during the Vibrant Gujarat Summit held in January 2019 to conduct scientific research on ETS.

J-PAL South Asia will serve as the design consultant and evaluation partner for the market and prepare a market design handbook outlining the detailed modalities of emission trading, roles of stakeholders, allocation of permits, trading deposit, fungibility period, compliance period, true-up period, etc. The GPCB, in consultation with a market oversight committee, will set parameters of market design. It would also accredit a market operator to run the platform for PM emission trading, said a senior official of the GPCB.