LG Electronics has become the first company in the world to receive Certified Emission Reduction (CER) credits in the appliance industry from the United Nations Framework Convention on Climate Change (UNFCCC).
Through the Clean Development Mechanism (CDM) project established in the Kyoto Protocol, each company will be awarded CER credits equivalent to the amount of reduced greenhouse gas emissions in developing countries by investing its technology and capital.
Companies that have secured CER credits can sell them to other companies that emit a large amount of CO2 such as petrochemical companies and power plants. The current price of the CER in 2015 stands at EUR 0.54 per ton.
In the Indian market, LG earned approximately 7,000 tons in CER credits. The company is planning to eliminate an additional 5.8 million tons of CO2 over the next 10 years and contribute to the improvements in power shortages and environmental problems in India. Credit of 5.8 million tons is expected to create EUR 3.1 million (3.9 billion won or US$3.37 million) in additional revenue.
The company will donate a portion of the sale proceeds to support impoverished women and children in India.
Meanwhile, LG Electronics is aggressively pushing ahead with the CDM project to acquire CER credits, as it has started producing and selling high efficiency refrigerators in India from Feb. 2013, reducing energy consumption.
With old-fashioned power plants and inefficient energy consumption, India also has environmental challenges, including air pollution and CO2 emissions, since the nation generates power using fossil fuels.