India is building its own carbon market under the Carbon Credit Trading Scheme (CCTS), mandated by the Energy Conservation (Amendment) Act 2022. This guide covers what Indian companies need to know.
What is CCTS?
The Carbon Credit Trading Scheme is India domestic carbon market framework, notified by MoEFCC in June 2023. It will have two segments:
- Compliance Market — For obligated entities in energy-intensive sectors
- Voluntary Market — For companies voluntarily reducing and trading credits
Obligated Sectors
The compliance market will initially cover designated consumers under the Perform, Achieve and Trade (PAT) scheme, including thermal power, cement, iron & steel, aluminium, textiles, pulp & paper, chlor-alkali, and fertiliser sectors.
How It Works
- BEE (Bureau of Energy Efficiency) sets sectoral emission intensity targets
- Companies exceeding targets earn carbon credit certificates
- Companies failing targets must purchase credits or face penalties
- Trading occurs on designated platforms (power exchanges)
Voluntary Carbon Market
Companies not under compliance obligation can participate through:
- Purchasing voluntary carbon credits for net-zero commitments
- Developing carbon offset projects (renewable energy, forestry, methane capture)
- Using credits for Scope 3 compensation or value chain decarbonisation
Screen carbon credit quality with our Carbon Offset Screener or track your emissions with ScopeTracer.