Carbon Credit Trading Scheme : In News
The Carbon Credit Trading Scheme (CCTS), 2023 introduced under the Energy Conservation (Amendment) Act, 2022, replaces the Perform, Achieve, and Trade (PAT) scheme to establish the Indian Carbon Market (ICM), aligning with India’s climate commitments under the Paris Agreement.
- Carbon Credit Trading Scheme is a market-based mechanism introduced to regulate and trade carbon credits under the ICM.
- The CCTS aims to decarbonize the Indian economy by pricing greenhouse gas (GHG) emissions and facilitating carbon trading.
- The PAT scheme focused on energy efficiency improvements in energy-intensive industries through Energy Saving Certificates (ESCerts).
- CCTS replaces PAT, shifting the focus from energy intensity to reducing GHG emission intensity, monitoring emissions per tonne of GHG equivalent.
- It issues Carbon Credit Certificates (CCC), each representing a one-tonne CO2 equivalent (tCO2e) reduction.
- CCTS introduces carbon pricing through two key mechanisms to ensure comprehensive carbon reduction efforts.
- Mandates energy-intensive industries (e.g., Aluminium, Cement, Fertilizers, Iron & Steel) to meet sector-specific GHG reduction targets. Entities exceeding targets earn CCC, those falling short must purchase credits.
- Allows voluntary participation from entities outside the compliance framework to earn carbon credits by reducing emissions.
- CCTS initially includes energy-intensive industries such as iron & steel, aluminium, cement, fertilizers, petroleum refineries, pulp & paper, and textiles (account for 16% of India’s total emissions).
- The power sector (40% of India’s GHG emissions) may be included later.
- Managed by multiple government bodies, including the Bureau of Energy Efficiency (BEE) and the National Steering Committee for Indian Carbon Market (NSCICM).
- India aims to cut emission intensity by 45% by 2030. The CCTS drives private sector involvement, encouraging clean technologies, renewables, and carbon capture.
