About Emissions Trading> Carbon As A Commodity> Upgrade Activities
Carbon Credits from Equipment Upgrade
In this example, an older power plant is upgraded to a clean new one. The new plant produces less emissions for the same kWh generated, and the difference in emissions can be turned into emission reduction credits. The project organizers use their account at the ICBE to document the reductions, and after verification, the ICBE extends ERC's to the plant owner or upgrade financiers. This happens when richer players invest in countries undergoing market transition. These are commonly referred to as Joint Implementation (JI) Projects. For example; Norwegian players receive credits for equipment upgrades in Poland.
There are set guidelines for turning such emission reductions into credits; the host government must agree with the project, the methodology used in estimating the savings etc., before credits can be transferred.