The government has officially notified the Carbon Credit Trading Scheme (CCTS), paving the way for the operationalisation of India’s domestic carbon market and accelerating efforts to reduce, remove, and avoid greenhouse gas (GHG) emissions. Minister of state for power Shripad Naik announced the development, outlining the steps taken to implement the Indian Carbon Market (ICM) and establish a structured carbon trading ecosystem.
Building the Indian Carbon Market
To fast-track implementation, the government has established the required institutional and regulatory framework. It has also notified Greenhouse Gas Emission Intensity (GEI) targets for seven energy-intensive sectors under the compliance mechanism. These targets will require industries to improve operational efficiency and adopt low-carbon technologies to curb emissions.
At the same time, approved methodologies under the offset mechanism have been finalised. Authorities have also put in place a robust monitoring, reporting and verification (MRV) system to ensure transparency and accountability. Procedures for accrediting carbon verification agencies have been notified to maintain the integrity of emission reductions.
How the Carbon Credit Mechanism Will Work
Under the scheme, obligated industrial entities must meet their assigned emission intensity targets. Companies that outperform their targets will earn Carbon Credit Certificates (CCC), which they can trade on power exchanges. This market-based approach is expected to create financial incentives for industries to invest in cleaner technologies. Meanwhile, non-obligated entities — including renewable energy producers and other low-carbon project developers — can voluntarily register emission-reduction activities to receive carbon credits, further expanding participation in the carbon market.
Financial and Regulatory Support
To ensure smooth execution, the Bureau of Energy Efficiency (BEE) will fund the scheme through fees and charges collected from participating entities, supplemented by its own resources. Regulatory oversight of carbon credit trading activities will rest with the Central Electricity Regulatory Commission (CERC), which will supervise transactions and maintain market discipline.
Institutional Structure in Place
The government has also established a multi-tier institutional framework to manage the scheme effectively.
A National Steering Committee, co-chaired by the Secretaries of the Power and Environment Ministries, will guide policy and implementation. Grid Controller of India Limited will function as the registry, while BEE will serve as the scheme’s administrator. Together, these institutions will oversee registration, certification, trading, and compliance activities under the Indian Carbon Market. As reported by knnindia.co.in, by notifying the CCTS and operationalising the carbon market, the government aims to create a transparent, market-driven system that rewards emission reductions and supports India’s broader climate and net-zero goals.
