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India's Carbon Market Takes Flight
29 Jan
Summary
- India established a Carbon Credit Trading Scheme in June 2023.
- Scheme uses dual mechanism: mandatory compliance and voluntary offsets.
- Carbon Credit Certificates (CCCs) will be traded on power exchanges.
India has made substantial strides in establishing its carbon market framework, a key component of its climate mitigation strategy. The government officially adopted the Carbon Credit Trading Scheme (CCTS) in June 2023.
This scheme functions through a dual approach, incorporating both mandatory compliance and voluntary offset mechanisms. Energy-intensive industrial sectors are targeted by the compliance component, which utilizes an emission intensity-based system. Sectors like cement and iron and steel are initially included, with entities earning Carbon Credit Certificates (CCCs) for exceeding their emission intensity targets.
These CCCs, measured in tonnes of CO2 equivalent, can be traded on power exchanges. The framework also includes an Offset Mechanism, allowing non-obligated entities to voluntarily register projects that reduce or avoid greenhouse gas emissions to earn CCCs. The government has approved 10 sectors for this voluntary mechanism, aiming to incentivize broader climate action.
