Carbon Credit Trading Scheme:
The Indian government announced greenhouse gas emissions intensity targets for entities in eight of the nine heavy industrial sectors participating in the Carbon Credit Trading Scheme’s compliance mechanism.
- The Carbon Credit Trading Scheme (CCTS) is a market-based framework developed under the Indian Carbon Market (ICM) to regulate and trade carbon credits.
- It aims to accelerate India’s transition to a low-carbon economy by assigning a monetary value to greenhouse gas (GHG) emissions.
- The primary aim of CCTS is to decarbonise industrial sectors by shifting focus from energy efficiency (PAT Scheme) to GHG emissions intensity
- The CCTS is overseen by the Bureau of Energy Efficiency (BEE) and the National Steering Committee for Indian Carbon Market (NSCICM), ensuring transparent and accountable governance.
Key Mechanisms under CCTS:
- Compliance mechanism: Entities in obligated sectors must meet sector-specific emission intensity targets. Those who exceed targets earn tradable CCCs, while others must buy credits.
- Offset mechanism: Entities outside the compliance mandate can voluntarily participate by reducing emissions and earning carbon credits, promoting broader climate participation.
- Under its Nationally Determined Contributions (NDCs), India targets a 45% reduction in emission intensity of its GDP by 2030
- The CCTS is a key policy instrument toward achieving this goal.
- The eight sectors include aluminium, cement, paper and pulp, chlor-alkali, iron and steel, textiles, petrochemicals, and petro refineries.
