India’s Carbon Credit Trading Scheme (CCTS):
The United Kingdom has officially recognized India’s Carbon Credit Trading Scheme (CCTS) as a qualifying carbon pricing framework under its Carbon Border Adjustment Mechanism (CBAM).
- A national market-based mechanism designed to establish the Indian Carbon Market (ICM) by pricing greenhouse gas (GHG) emissions, issuing tradable Carbon Credit Certificates (CCCs), and driving industrial decarbonization.
- Notified by the Government of India in June 2023 under powers conferred by the Energy Conservation (Amendment) Act, 2022, with detailed compliance regulations adopted in July 2024.
- Aim is to accelerate the decarbonization of the Indian economy, fulfill India’s Nationally Determined Contributions (NDCs) under the Paris Agreement, and incentivize emission cuts across energy-intensive sectors through a transparent carbon-trading exchange.
Key Features:
- Dual-Track Framework: Combines an obligatory Compliance Mechanism for energy-intensive sectors with a Voluntary Offset Mechanism allowing non-obligated entities to register GHG reduction or removal projects.
- Governance Architecture: Governed by the National Steering Committee for the Indian Carbon Market (NSCICM), co-chaired by the Ministry of Power and MoEFCC, with the Bureau of Energy Efficiency (BEE) serving as the chief administrator.
- Transition from the PAT Scheme: Builds upon and gradually absorbs the existing Perform, Achieve, and Trade (PAT) energy efficiency mechanism, transitioning obligated industrial units from specific energy consumption targets to carbon emission intensity benchmarks.
- Carbon Credit Certificates (CCCs): Entities outperforming their assigned emission intensity benchmarks earn CCCs (denominated in units of 1 tonne of CO₂ equivalent), while underperforming entities must purchase certificates to meet compliance.
- Comprehensive Emission Scope: Follows a gate-to-gate approach covering Scope 1 (direct combustion and process emissions) and Scope 2 (indirect emissions from electricity and heat), initially targeting CO₂ and perfluorocarbons (PFCs).
