“Implementation of NbS and other carbon reduction projects will directly promote carbon farming”

EKI Energy Services Ltd. is a leading Carbon Credit Developer & Supplier across the globe. Founded in 2008, the Bombay Stock Exchange listed company has been passionately working towards rehabilitating planet Earth to a future of net-zero carbon emission. EKI offers sustainable solutions for climate change and carbon offsets with global standards like CDM, VCS, Gold Standard, GCC, IREC, TIGR and others. With an aim to contribute to the development of a climate resilient global economy, the company offers strategic solutions to businesses and organisations globally to achieve their climate ambition. The company has incorporated a new associate – GHG Reduction Technologies Pvt Ltd. for the backward integration of carbon credit supply. Manish Dabkara, CMD & CEO, EKI Energy Services Ltd shares his views with AgroSpectrum on the status of carbon farming market in India and the way forward

How is EKI helping farmers to generate an additional, sustainable income from carbon cropping?
We at EKI have defined best practices for the implementation of Agricultural Nature- based Solutions (Ag-NbS) based on various on-the-ground experiences to assist project designers, proponents, farmers and conservation practitioners seeking repayable project financing for new initiatives.Ag-NbS can help farmers adapt to future weather extremes such as droughts, severe storms, or coastal flooding by improving soil health and water retention, reducing soil erosion,and buffering shorelines, as well as promoting food and nutrition security through varied production systems and also as a source of income. They can reduce the usage of chemical additives, lowering production costs and make food safer.

NbS are a form of Ecosystem-based Mitigation (EBM) that can contribute to combating climate change by preventing the degradation and loss of natural and managed ecosystems. When effectively implemented, nature-based solutions can deliver a triple benefit in terms of agricultural productivity and resilience, climate change mitigation, and biodiversity enhancement. NbS has been used to address a wide range of societal challenges, including climate change, human health, disaster risk reduction, food and water security, and so on. Due to uncertainty in weather patterns, water insecurity, and soil degradation; agriculture is one of the sectors that face several market failures. Although Ag-NbS are projected to improve air, water, and soil quality significantly, the upfront costs and risks of transitioning to NbS make the alternative unaffordable for many farmers.

Transitioning to Ag-NbS usually necessitates an ecosystem of actors, including NGOs, governments, corporations, and others, coordinating their activities through clear policies and institutional participation. Investments should be made to help resource-strapped farmers embrace natural farming practices such as replacing synthetic fertilisers with organic soil amendments.

What are the challenges in the carbon farming trading sector in India?
At EKI, we develop mechanisms involved in carbon farming to help restore the lost functions of the ecosystem and strengthen ecosystem service delivery considering all the aforementioned challenges. Our framework mainly includes soil health and water quality (environmental well-being), in addition to improved farm productivity and profitability. Effective planning strategies are needed that not only meet human demands but also safeguard environmental resources. Carbon farming initiatives (CFI) call for agro-environmental policies to encourage farmers to use sustainable farming techniques. However, getting farmers to participate in such programmes is challenging,owing to the complexity of scheme design and implementation, as well as policymakers’, investors’, and farmers’ competing objectives.

In addition to inadequate knowledge or management abilities, some of the hurdles to carbon farming are directly related to landowners’ interests. Political instability has a significant impact on such practices’ adoption and implementation. Furthermore, ambiguity about environmental consequences and a lack of understanding of such policies and plans may impede their implementation.
In fact, many farmers are unaware of the benefits and limitations of carbon farming, which is exacerbated by high input costs and concerns about the impact of carbon farming on yield and farm productivity. Significant challenges to carbon farming include capital investment, incompatibility of carbon farming with traditional farm management techniques, and potential impact on farmers’ ability to seek financial help from banks or other sources. Along with terrestrial carbon sequestration, carbon farming provides an opportunity to sustain biodiversity, as well as economic and social co-benefits. However, its successful execution is dependent on adequate institutional structures and information dissemination. Farmers must be given exact information on carbon removal, estimated financial rewards in the carbon market, changes in carbon yields based on soil type, potential effects on property value, and agricultural production.

What inputs are required for the growth of the carbon credit trade sector in India?
The growth of carbon credit trade in India requires the following:

• A national legislation by Parliament to pave the path for the formation of requisite market systems and legitimisation of the National Carbon Registry & National Carbon Market to meet the country’s commitments under Nationally Determined Contribution (NDC)

• Respective line ministries, which may include the Ministry of Environment, Forest and Climate Change, Ministry of Power, Ministry of Finance, Ministry of Commerce and Industry, etc., to effectively form the national policy for the formation of a national carbon market.

• Regulation to be brought in on an urgent basis to formulate the rules for the operation of such a carbon market. The market should be effectively sunk with the National Carbon Registry.

• Effective level playing field to support private sector participation in the origination of carbon emission reductions (projects) and country endorsement to participate in International Voluntary Carbon trading, bringing the requisite FDIs in India

• In the recent future, with the advent of operational modalities under Article 6 Supervisory Body of UNFCCC and its administered International Carbon Registry, the Indian National Carbon Registry should effectively be linked on a real-time basis with the International Carbon Registry.

• The above measures will help to establish a transparent and vibrant carbon market, providing an indexing facility to leverage the most required green/carbon finance instruments and facilitating India’s carbon neutral growth path while helping in attaining its NDC goal.

What are your growth plans and strategies in FY 22-23?
EKI Energy Services has achieved numerous milestones in 2022 and as we gear up for 2023, we promise to continue the momentum and empower the planet’s journey to net-zero. We have recently announced a host of strategic plans in preparation for COP27 as a part of our roadmap for FY 2022-23. Our new brand identity of ‘Steering the planet to net-zero’ explains our continued focus on climate action. We have committed to becoming net-zero by 2030 and also mobilise up to 1 billion credits within the next 5 years (by 2027). We aim to ensure that as businesses globally plan their roadmap for FY 22-23, they will take inspiration from us and include definitive climate goals and targets for emission reductions and net-zero. We also plan to enhance our international presence and enter into new geographies and further consolidate our leadership position. We aim to further strengthen the backwardintegration of the carbon credit supply chain through environment-friendly projects that also enable community upliftment such as biogas and tree plantation amongst others. We will continue to look for new growth avenues to play a bigger role in global carbon asset management.

How do you foresee the future of the carbon farming trading sector in India and what are the plans of the company to create direct market linkages for carbon credit?
As the carbon credit market continues to grow exponentially, we expect the carbon farming sector to grow as well. The implementation of NbS projects and other carbon reduction projects that enable greater focus on farmland practices and sustainable agriculture will directly promote carbon farming which will also ensure a steady supply of carbon credits. Policy guidelines will also aid the development of carbon farming. We continue to drive focused efforts to increase NbS projects. We also have a partnership with Shell Overseas Investments B.V. (The Netherlands) for this. These projects will enable carbon reduction and bring greater focus on carbon farming. As the ecosystem develops, more and more farmers will join the quest for carbon financing given its ability to make their farmland and farming investments self-sustaining for higher produce even as they generate additional revenues from carbon credits. COP26 witnessed the zeal of nations to turn the 2020s into a decade of climate action and support including India’s commitment to achieving net-zero by 2070. The future of the industry seems bright. But it isn’t easy for any country to reduce their carbon emissions to meet their climate goals and hence, the requirement for services like carbon credits will increase gradually because emission trading is usually considered the best system to reduce emissions.

Dipti Barve
dipti.barve@mmactiv.com

EKI Energy Services Ltd. is a leading