SDG 9: Industry, Innovation, and Infrastructure | SDG 13: Climate Action
Ministry of Power | Ministry of Environment, Forest and Climate Change | Bureau of Energy Efficiency (BEE)
The framework for the Indian Carbon Market (ICM) under the Carbon Credit Trading Scheme (CCTS) has been officially formulated. This initiative lays the institutional and regulatory groundwork for incentivizing the reduction of Greenhouse Gas (GHG) emissions from core industrial sectors.
Key Components and Institutional Architecture:
Institutional Structure:
National Steering Committee (NSCICM): Co-chaired by the Secretaries of the Ministry of Power and the Ministry of Environment, Forest and Climate Change.
Registry: Grid India functions as the official Registry for tracking and recording credits.
Administrator: The Bureau of Energy Efficiency (BEE) serves as the Administrator.
Dual Mechanism of Operation: The CCTS operates through two distinct systems:
Compliance Mechanism: Targets emission-intensive industries (Obligated Entities) who must meet assigned Greenhouse Gas Emission Intensity (GEI) targets. Entities that outperform these targets are eligible for Carbon Credit Certificates.
Offset Mechanism (Voluntary): Allows Non-Obligated Entities to voluntarily register projects that reduce, remove, or avoid GHG emissions for the purpose of seeking the issuance of Carbon Credit Certificates.
Sectors Covered (Compliance): The scheme transitions several energy-intensive industries from the older Perform, Achieve and Trade (PAT) scheme into the CCTS Compliance Mechanism. These include aluminium, cement, chlor-alkali, petrochemicals, petroleum refineries, pulp and paper, and textiles.
Sectors Excluded (Compliance): Thermal power plants have specifically not been transitioned from the PAT scheme to the CCTS Compliance Mechanism.
Policy Relevance
This action is a fundamental regulatory step, establishing a market-based mechanism to achieve Indiaβs enhanced Nationally Determined Contributions (NDCs) and long-term climate goals. By creating a compliance obligation for major industrial emitters and simultaneously encouraging voluntary action via the Offset Mechanism, the CCTS is designed to mobilize private sector investment and financing toward sustainable projects, ensuring the most cost-effective path for the low-carbon transition of key industrial sectors.
Relevant Question for Policy Stakeholders: What specific timeline and criteria will the government use to determine when and how thermal power plants will be transitioned from the PAT scheme into the CCTS Compliance Mechanism?
Follow the full news here: Framework for Carbon Credit Trading Scheme (CCTS)