The Indian government has released a draft of the Carbon Credit Trading Scheme (CCTS) to develop a domestic carbon market. The CCTS draft outlines the institutional framework and mechanisms necessary for the functioning of the Indian carbon credit market. The scheme was introduced through the Energy Conservation (Amendment) Bill, 2022, which gives the Central government the power to specify the scheme.
According to experts, the market can potentially reduce the cost of achieving Nationally Determined Contributions and net zero goals. The government aims to notify the CCTS by June and plans to organise 20-30 nationwide workshops to discuss various aspects of the market. The Bureau of Energy Efficiency (BEE) is proposed to be the administrator of the Indian Carbon Market (ICM), with a board established to regulate the ICM and suggest policies, set up frameworks for voluntary carbon credit trading, and specify criteria for selling carbon credit certificates to foreign buyers.
While establishing a carbon or emissions market has been part of India’s overall climate action strategy, it has gained momentum after the Conference of Parties in Glasgow. Emissions trading involves countries selling excess emission units to other countries that need the excess units to meet their emission targets.
