India Notifies Carbon Credit Trading Scheme to Accelerate Emissions Reduction and Low-Carbon Transition

The Government of India has officially notified the Carbon Credit Trading Scheme (CCTS), aimed at reducing, removing, and avoiding greenhouse gas emissions from the Indian economy by introducing a structured framework for pricing emissions through the trading of Carbon Credit Certificates (CCC).

The notification marks a key milestone in the operationalisation of the Indian Carbon Market (ICM). As part of the implementation process, the government has established a comprehensive institutional and regulatory framework, including the notification of Greenhouse Gas Emission Intensity (GEI) targets for seven energy-intensive sectors under the compliance mechanism.

To strengthen the offset mechanism, the government has approved a set of carbon accounting methodologies, instituted a robust monitoring, reporting, and verification (MRV) framework, and laid down procedures for accreditation of carbon verification agencies, enabling transparent and credible emissions accounting.

Under the ICM framework, obligated industrial entities are required to reduce their emissions by adopting energy-efficient processes and low-carbon technologies. Entities that exceed their prescribed GEI targets will be eligible to receive Carbon Credit Certificates, which can be traded through designated power exchanges. Additionally, non-obligated entities, including renewable energy producers, can voluntarily register approved emission reduction projects to earn CCCs under the offset mechanism.

The financial support for the implementation of the scheme will be provided by the Bureau of Energy Efficiency (BEE), funded through fees and charges collected from participating entities, along with its internal resources. The Central Electricity Regulatory Commission (CERC) will oversee regulatory aspects related to trading activities within the Indian Carbon Market, including governance of carbon credit transactions.

Institutional oversight of the scheme will be undertaken by a National Steering Committee, co-chaired by the Secretaries of the Ministry of Power and the Ministry of Environment, Forest and Climate Change (MoEFCC). Grid Controller of India Limited (GCIL) will function as the central registry for carbon credits, while BEE will serve as the scheme administrator.