India Sets Ground Rules For Carbon Credit Offsets In Trading Scheme

As the carbon market is set to launch in 2026, the Ministry of Environment has begun groundwork to help organizations understand the basics of the market and how to trade within it. India’s carbon market architecture has taken a significant step forward with the release of the “Detailed Procedure for Offset Mechanism” under the Carbon Credit Trading Scheme (CCTS) by the Bureau of Energy Efficiency.

The system aims to scale India's climate goals through a structured and measurable offset scheme is supported by the Ministry of Environment and the Bureau of Energy Efficiency.

Supported by the Ministry of Environment and the Bureau of Energy Efficiency, the system seeks to scale India's climate goals through a systematic and quantifiable offset scheme.

In order to provide a more comprehensive understanding of carbon emissions, the Bureau of Energy Efficiency (BEE), through its Carbon Market program, explains that India committed in its initial Nationally Determined Contributions (NDCs) to lowering the greenhouse gas (GHG) emission intensity of its economy from 2005 levels by 33–35% by 2030. The Indian government updated their NDCs in August 2022, raising the goal to a 45% decrease from 2005 levels by 2030.

For project developers looking to create carbon credits, the recently published process offers a detailed road map.. It includes registration and validation by Accredited Carbon Verification Agencies (ACVAs), periodic monitoring and reporting, and issuance of carbon credits following verification. These credits will then be recorded in the National Registry, forming a tradable instrument under the Carbon Credit Trading Scheme.

Registration and Issuance Procedure
The companies have to register an account, get their project approved, and go through validation and verification to receive carbon credits. Only projects from specific sectors will be allowed under the offset mechanism. These sectors have been divided into sectors and sub-sector categories.

Projects eligible under this scheme must demonstrate real, measurable, and verifiable emissions reductions. The scheme currently prioritises sectors such as renewable energy, energy efficiency, waste management, and sustainable transport, though the list may expand as the market matures.

The Bureau of Energy Efficiency will act as the administrator, while the Ministry of Environment will oversee policy direction. Accredited bodies will play a central role in verifying and certifying emission reductions to maintain credibility and transparency.

Project Cycle
The offset mechanism follows a step-by-step project cycle, shown in graph below. This cycle starts when a project is listed on the ICM portal and ends when it becomes eligible to receive Carbon Credit Certificates (CCCs).

As India moves closer to 2026, the focus will be on piloting the mechanism, raising awareness among industries, and aligning domestic carbon markets with global best practices.

(Source: "Detailed Procedure for Offset Mechanism" By the Bureau of Energy Efficiency)