India

This Country Framework is part of the Regulatory Frameworks for Project-Based Carbon Credit Markets. To learn more click here.

Overview

India has established a comprehensive and ambitious carbon market framework through the Carbon Credit Trading Scheme (CCTS) 2023, creating an integrated approach to carbon pricing that combines mandatory compliance mechanisms with voluntary offset generation under a unified regulatory structure. The Energy Conservation (Amendment) Act, 2022,¹ represents India’s strategic response to achieving its enhanced nationally determined contributions (NDCs) under the Paris Agreement, particularly the target of reducing greenhouse gas (GHG) emission intensity by 45 percent by 2030 compared to 2005 levels, and ultimately achieving net-zero emissions by 2070.²

The Indian Carbon Market (ICM) architecture is characterized by a dual-track system that operates through two distinct but complementary mechanisms. The compliance mechanism targets obligated entities from nine energy-intensive industrial sectors, including aluminum, cement, iron and steel, paper, chlor-alkali, fertilizer, petroleum refining, petrochemicals, and textiles, and requires them to meet binding GHG emission intensity reduction targets.³ These sectors, which collectively account for a substantial portion of India’s industrial emissions, transitioned from the Perform, Achieve, and Trade (PAT)⁴ scheme to the CCTS framework,⁵ with the first compliance cycle commencing in fiscal year 2025-2026.

Complementing this compliance approach, the offset mechanism enables non-obligated entities across diverse sectors, including mangrove afforestation and reforestation, renewable energy, industrial energy efficiency, and emerging technologies like green hydrogen, to voluntarily develop projects that reduce, remove, or avoid GHG emissions, thereby generating tradable carbon credit certificates (CCCs).⁶ On March 27, 2025, the Bureau of Energy Efficiency (BEE) operationalized this offset mechanism through publication of the Detailed Procedure for Offset Mechanism Under Carbon Credit Trading Scheme (Version 1.0), which provides comprehensive guidelines for project registration, methodology development, validation and verification protocols, sustainable-development safeguards, and credit issuance procedures.⁷

Also on March 27, 2025, the Ministry of Power approved eight initial crediting methodologies spanning renewable electricity generation, green hydrogen production, industrial energy efficiency, landfill methane recovery, and nature-based solutions, including mangrove afforestation and reforestation. This approval followed an earlier public consultation process, during which the BEE released 12 draft methodologies in January 2025 across the nine Phase 1 sectors. Since then, India has further expanded its methodology framework, with three additional draft methodologies published in August 2025 covering biomass electricity generation, compressed biogas production, and enhanced agricultural practices.⁸

India is also actively preparing to integrate Article 6 of the Paris Agreement with its domestic carbon market. The government has notified the National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA)⁹ and approved lists of activities eligible under Articles 6.2 and 6.4. A memorandum of cooperation on the Joint Crediting Mechanism with Japan was signed on August 7, 2025―India’s first bilateral partnership under Article 6.2. Article 6 modules will be embedded in the ICM portal, allowing certain CCCs to be internationally transferred with corresponding adjustments. As of January 2026, India is finalizing the ICM portal and registry, with government statements indicating that market operations and digital trading infrastructure are expected to become operational by mid-2026.¹⁰

I. Supply-Side Regulations

India is operationalizing a unified, project-based carbon market under CCTS 2023,¹¹ notified―i.e., formally published in the official gazette―under the Energy Conservation Act 2001 (as amended in 2022). The scheme establishes a dual-track architecture: a compliance mechanism for large energy-intensive industries with binding GHG emission intensity targets, and an offset mechanism under which non-obligated entities can register mitigation projects and generate tradable CCCs. In 2025, BEE began formal rollout of the offset mechanism by publishing the detailed procedure on March 27, 2025, and approving eight initial crediting methodologies, which followed the release of 12 draft methodologies for consultation in January 2025; three additional drafts were later introduced in August 2025.¹² These methodologies span Phase 1 sectors across energy, industry, waste, agriculture, forestry, and transport, while Phase 2 covers construction, solvent use, fugitive emissions, and carbon capture, utilization, and storage (CCUS).¹³

A. Regulatory Framework

Market Classification: India’s carbon market operates as a hybrid system: While the CCTS allows for CCCs to be generated voluntarily under the offset mechanism, as of April 2026, those cannot be used to meet compliance obligations, under the CCTS, and there is no formal linkage between the offset mechanism and the compliance pillar.¹⁴ The compliance mechanism covers designated energy-intensive sectors with legally binding GHG emission intensity (GEI) targets; obligated entities must buy and surrender CCCs (i.e., submit them to meet their compliance obligation, distinct from permanent retirement) generated under the compliance mechanism to cover any shortfall against their targets in each compliance year. The offset mechanism allows non-obligated entities (e.g., in energy, industry, waste, agriculture, forestry, transport, construction, solvent use, fugitive emissions, and CCUS) to voluntarily implement mitigation projects and generate CCCs under government-approved methodologies. These CCCs can be traded in the domestic voluntary market or, once authorized, they can be used under Article 6 of the Paris Agreement.
Regulatory Status: India’s project-based carbon credit market (PCCM) operates under a statutory framework with legally binding regulations established through multiple layers of national legislation and administrative procedures:
Primary Legislation (Binding Statutory Authority): The Energy Conservation (Amendment) Act, 2022, was enacted on December 19, 2022.¹⁵ This act empowers the central government under Section 14(w) to specify a carbon credit trading scheme and authorize CCC issuance. This is the foundational statutory authority for India’s carbon market.
Carbon Credit Trading Scheme, 2023: The CCTS establishes the institutional architecture of ICM, including the National Steering Committee for the Indian Carbon Market (NSCICM); defines “carbon credit certificates;” sets out the compliance and offset mechanisms; assigns roles to BEE and the Grid Controller of India Limited (GCIL); and provides the basic framework for CCC issuance, trading, and surrender.
Operational Procedures (Binding Administrative Rules): The detailed procedure for the offset mechanism¹⁶ under CCTS (effective March 27, 2025) operationalizes the offset mechanism, specifying the project cycle (design, registration, validation, verification, monitoring, and issuance), sectoral scope, sustainable-development safeguards, additionality tests, and the use of approved methodologies and tools. Project participation is voluntary, but once registered, projects must comply with binding measurement, reporting, and verification (MRV) requirements and issuance procedures.
Government Position: The two national-level regulations that underpin supply are the Energy Conservation (Amendment) Act, 2022, and the CCTS, 2023. Three operational procedures that implement India’s CCTS are as follows:

Detailed Procedure for Compliance Mechanism Under CCTS: This procedure provides operational rules for the compliance pillar, including target allocation, measurement, reporting and verification, CCC calculation, issuance, banking and borrowing rules, trading arrangements via power exchanges, and penalties for non-compliance. BEE issued the draft and final GEI targets for obligated sectors in 2025, and the Ministry of Power (MoP) formalized these targets under CCTS, making them legally binding for the compliance period FY 2025–2026 to 2026–2027.¹⁷
Detailed Procedure for Offset Mechanism Under CCTS (effective March 27, 2025): This procedure operationalizes the offset mechanism, specifying the project cycle (design, registration, validation, verification, monitoring, and issuance), sectoral scope, sustainable-development safeguards, additionality tests, and the use of approved methodologies and tools.¹⁸
Greenhouse Gas Emission Intensity Target Rules: These rules make GEI reduction targets legally binding for an initial set of obligated entities in aluminum, cement, chlor-alkali, and paper and pulp, with targets expressed for FY 2025–2026 and FY 2026–2027.¹⁹ Through the January 2026 Greenhouse Gas Emission Intensity Target (Amendment) Rules, 2025, GEI targets were also notified for petroleum refineries, petrochemicals, textiles, and secondary aluminum, expanding coverage to eight energy-intensive sectors.²⁰

Key Authorities:
MoP is the nodal ministry responsible for implementing CCTS under the Energy Conservation Act.
NSCICM, chaired by the MoP secretary and co-chaired by the environment secretary, serves as the apex decision-making body recommending sector coverage, target-setting parameters, methodology frameworks, and major scheme design revisions.²¹
BEE acts as the scheme administrator—developing methodologies and tools, accrediting verification agencies, managing compliance reporting, validating and issuing CCCs, and operating the ICM portal.
GCIL functions as the national registry operator,²² maintaining the ICM registry and recording the issuance, transfer, banking, and retirement of CCCs.
The Central Electricity Regulatory Commission (CERC), under the Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026, regulates the trading of CCCs on power exchanges, including approval of business rules, market conduct oversight, and prevention of market manipulation.²³
The Ministry of Environment, Forest, and Climate Change (MoEFCC) acts as India’s National Designated Authority for Article 6 and is responsible for authorizing international mitigation activities and corresponding adjustments and ensuring alignment of CCTS with India’s NDC architecture.²⁴
The Central Pollution Control Board (CPCB) enforces penalties and environmental compensation in cases of noncompliance with GEI targets under the compliance mechanism.²⁵
Sanctions: Project developers, validation agencies, and verification bodies face separate sanctions under the offset mechanism:
Credit Cancellation or Revocation: If a project is found to have violated additionality, permanence, or MRV requirements after issuance, BEE can cancel or revoke issued CCCs and require repayment of any proceeds.²⁶
Suspension or Blacklisting: Project developers and accredited carbon verification agencies (ACVAs)²⁷ may likewise be suspended or de-accredited for noncompliance with verification protocols. In cases of deliberate fraud or obstruction of verification, actions may be taken under the Energy Conservation Act.²⁸

B. Credit Generation Standards

Eligible Activities: Under the offset mechanism, BEE designates eligible sectors and approves methodologies under which non-obligated entities may generate CCCs. Phase 1 sectors include energy, industries, transport, waste handling and disposal, agriculture, and forestry, and Phase 2 sectors include construction, solvent use, fugitive emissions, and CCUS, as listed in the detailed procedure for the offset mechanism.²⁹ Approved and draft methodologies span the following:

Energy and Industry: grid-connected renewables, green hydrogen, biomass energy, industrial energy-efficiency upgrades, and process optimization
Waste and Agriculture: landfill gas and biogas, compressed biogas, improved agricultural practices, and rice cultivation techniques
Forestry and Land Use: afforestation, reforestation, and agroforestry
Transport and Emerging Technologies: electric vehicle integration and other low-carbon transport measures, with methodologies for CCUS and advanced technologies in development

Activities mandated by existing law, regulation, or policy are excluded to preserve regulatory surplus. Projects must begin on or after January 1, 2025 (the reference start date specified in the detailed procedure for the offset mechanism), to ensure that no reductions occurring before the applicability of the CCTS offset mechanism are credited retroactively.³⁰

Methodology Framework: India’s methodologies are adapted from the Clean Development Mechanism (United Nations Framework Convention on Climate Change), refined by BEE, and do not formally reference external standards like the Verified Carbon Standard or International Organization for Standardization (ISO). They do incorporate Intergovernmental Panel on Climate Change (IPCC) guidelines and ISO 14064 (the international standard for GHG quantification and verification) for GHG quantification and MRV approaches.³¹
MRV Requirements: Projects must undergo third-party validation and verification by separate ACVAs recognized by BEE,³² holding ISO 14065:2020 accreditation (the international standard for bodies that validate and verify GHG information). The same agency may not perform validation and verification in a given round. MRV protocols, project documentation, and credit issuance are all subject to centralized review from BEE.
Registry System: All CCCs, including those issued under the offset mechanism, are recorded in the ICM registry operated by GCIL.³³ The registry serves as the central platform for project registration data, CCC issuance, serial number assignment, transfers, banking, retirement, and cancellation. It incorporates safeguards against double counting through unique digital identifiers, project exclusivity rules, and centralized issuance review by BEE. The registry is expected to support Article 6 authorization and corresponding adjustment tracking as the ICM portal expands in FY 2025–2026.

C. Integrity Principles

Additionality Tests: Projects under the offset mechanism must demonstrate additionality in accordance with the detailed procedure³⁴ and the applicable BEE methodology. Additionality is assessed through three required tests:
Regulatory Surplus: The activity must not be mandated by any existing law, regulation, or government policy.
Financial or Investment Barrier Test: The project developer must demonstrate that the activity is not financially attractive or viable without carbon credit revenue, based on transparent investment or cost-benefit analysis.
Common Practice Assessment: The activity must not be widely deployed or standard practice in the applicable sector or region under prevailing circumstances.
Permanence Safeguards: For nature-based and land-use projects, post-issuance long-term monitoring is required, though no specific monitoring duration is prescribed in the current regulations. As of 2025, specific central buffer or reversal insurance rules are not yet enacted for all project types but are under review, referencing international best practice.
Quantification Standards: Projects must use conservative, BEE-approved methodologies, define baselines per sector, deduct uncertainties, address leakage, and retain data for inspection. Project proponents must retain all monitoring and verification data for 10 years for inspection or audit by BEE or GCIL. Quantification must ensure that each CCC represents a real, measurable, permanent, and independently verifiable reduction or removal.
Double-Counting Prevention: Project exclusivity, serial identity checks, a single national registry for all issuances and cancellations, and public issuance disclosure prevent double counting. Article 6.2 transactions receive explicit adjustments in the registry.

D. Sustainable Development

Co-Benefits: All offset mechanism projects must comply with the sustainable-development (SD) safeguards defined by BEE. Each project must include an SD risk-benefit assessment in its project design document (PDD), demonstrating that the activity does not result in significant negative environmental or social impacts, as required under the offset procedure. Projects undergo a 30-day public comment period and must be validated by an independent ACVA, which confirms alignment with India’s SD criteria and contribution to relevant sustainable development goals (SDGs). Only co-benefits that are demonstrated, documented, and quantifiable under the approved methodology may be reported; co-benefits do not generate additional CCCs but must be transparently disclosed.
Net-Zero Compatibility: Project eligibility and additionality tests require compatibility with India’s 2070 net-zero target; exclusion of fossil fuel incremental projects avoids technology lock-in, aligning with GEI Target Rules.

II. Demand-Side Regulations

A. Use Authorization Framework

Applications Allowed:
Voluntary Claims: CCCs issued under the offset mechanism can be purchased by companies, institutions, and individuals for voluntary climate claims; corporate responsibility; and environmental, social, and governance (ESG) purposes. India has not yet issued a dedicated national framework for voluntary claims (e.g., Voluntary Carbon Markets Integrity Initiative [VCMI]–style rules), but the ICM registry, operated by GCIL under the CCTS, provides the legal infrastructure for account opening, transfer, and retirement of CCCs generated by offset projects across energy, industry, land-use, waste, and other sectors. Use of CCCs for voluntary purposes is currently governed by general company law and disclosure obligations, combined with CCTS registry and issuance rules, rather than a bespoke voluntary use regulation.³⁵
Compliance Integration: As of 2025, CCCs issued under the offset mechanism cannot be used by obligated entities to meet their GEI targets under the CCTS compliance mechanism. CCTS treats CCCs from overperformance by obligated entities (compliance pillar) and CCCs issued to non-obligated entities (offset pillar) as legally identical certificates, but their permitted uses differ: Only CCCs created under the compliance mechanism can be surrendered against GEI targets.³⁶ The offset mechanism remains formally separate from the compliance mechanism, and no legal instrument has yet established a linkage allowing offset-generated CCCs to count toward domestic compliance obligations.³⁷
NDC Alignment: CCTS is designed as one of the policy instruments supporting India’s NDC, particularly the goal of reducing the emissions intensity per unit of economic output and progressing toward net-zero emissions by 2070. Under the compliance mechanism, CCCs surrendered by obligated entities are domestic compliance units and are counted within India’s national inventory and NDC accounting.³⁸ Separately, CCCs issued under the offset mechanism and used domestically for voluntary purposes remain within India’s domestic mitigation boundary. The National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA) governs India’s participation in international cooperative approaches.³⁹ Where a project registered under the offset mechanism falls within the MoEFCC-notified list of eligible Article 6 activities and, after issuance of CCCs, seeks international transfer under Article 6.2, the project developer must obtain NDAIAPA authorization. Only after authorization would the internationally transferred mitigation outcomes be subject to corresponding adjustments in the Indian Carbon Market registry, once the Article 6 modules of the ICM portal are operational.
Government Position:
India’s demand-side rules for the use of CCCs derive from the Energy Conservation (Amendment) Act to establish a carbon credit trading scheme and regulate the issuance, transfer, surrender, and retirement of CCCs. CCTS provides the overarching framework for CCC use, defining the compliance mechanism for obligated entities and the voluntary offset mechanism for nonobligated entities. The detailed procedure for the compliance mechanism and the detailed procedure for the offset mechanism together clarify the conditions under which CCCs may be transferred, surrendered, or retired.
Under current rules, only CCCs issued through the compliance mechanism may be used toward legally binding GEI targets. Under the compliance mechanism, only obligated entities that fall short of their GEI targets are required to acquire and surrender CCCs equal to the shortfall through their registry accounts, after which GCIL records their retirement in the ICM registry. Obligated entities that meet their targets have no surrender obligation. Obligated entities that outperform their targets may receive compliance CCCs, which can be banked for future compliance use or traded, subject to applicable market rules. All compliance-related retirements are subject to public disclosure. CCCs issued under the offset mechanism, in contrast, are available exclusively for voluntary domestic use or, when authorized under Article 6, for international transfers. Voluntary cancellations are also logged by GCIL to ensure transparency and prevent double counting.
Oversight Bodies: Governance of project-based carbon credits under India’s offset mechanism is shared across a defined set of institutions:
MoP is the overall custodian of the CCTS, responsible for formally issuing scheme-level rules, approving methodology frameworks, and enabling the implementation of the offset mechanism across eligible sectors.
BEE is the central administrator for the offset mechanism. BEE develops methodologies, oversees project registration, reviews validation and verification reports, approves the issuance of offset-CCCs, manages safeguards for sustainable development, and operates the ICM portal for project documentation and MRV review.
GCIL operates the ICM registry, where all offset-CCCs are issued, assigned unique serial numbers, transferred, canceled, or retired. GCIL ensures registry-level transparency and double-counting prevention and will host Article 6 authorization, first transfer, and corresponding adjustment modules as they come online.
ACVAs are independent third-party validators and verifiers accredited in accordance with ISO 14065:2020 and ISO 17029 (the conformity assessment standard governing validation and verification bodies). ACVAs conduct validation of the PDD, verify monitored emission reductions or removals, and issue validation and verification statements that form the basis for offset-CCC issuance.
MoEFCC serves as the National Designated Authority for Article 6, responsible for assessing international eligibility of offset projects, authorizing units for Article 6.2 transfers, and ensuring alignment with India’s NDC and sustainable-development requirements. MoEFCC does not govern domestic voluntary use but oversees international use of offset-CCCs.
CERC is the regulator for exchange-based trading of CCCs under the Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026, notified on February 27, 2026.⁴⁰ The regulations establish the market framework for dealing in CCCs on power exchanges, or through other modes that may be separately permitted by the commission, in accordance with the CCTS. CERC approves exchange rules, business rules, and bylaws; oversees price discovery and market conduct; and exercises market oversight in accordance with the MoP market regulations. While the market-side regulatory framework is now in place, actual trading rollout still depends on operationalization through approved procedures, exchange business rules, and registry-exchange integration.
Standards Integration:
Verification and reporting under the offset mechanism follow BEE’s sovereign MRV rules but incorporate internationally recognized assurance principles. ACVAs must be accredited by the Quality Council of India and the National Accreditation Board for Certification Bodies in accordance with ISO 14065:2020 and ISO 17029, which govern validation and verification bodies for greenhouse gas–related activities. While the CCTS does not formally adopt ISO 14064 standards or voluntary market protocols, BEE methodologies draw on established quantification principles and use IPCC 2006 (updated in 2019) guidelines for emission factors when national factors are unavailable.
Corporate buyers of offset-CCCs may disclose climate actions, including voluntary credit retirement under the Securities and Exchange Board of India’s (SEBI’s) Business Responsibility and Sustainability Report (BRSR)⁴¹ and BRSR Core assurance requirements for listed entities, although SEBI has not issued a dedicated carbon credit reporting standard. Thus, standards integration occurs through MRV accreditation (ISO-aligned) and voluntary corporate disclosure channels, rather than a unified cross-standard carbon credit rulebook.
Enforcement Mechanisms:

Offset Mechanism (Project-Based or Offset-CCCs): Enforcement for project-based carbon credits under the offset mechanism is grounded in CCTS 2023, the detailed procedure for the offset mechanism (2025), and the Greenhouse Gas Emission Intensity Target Rules, 2025,⁴² which are issued under the Environment (Protection) Act, 1986. BEE may reject, suspend, or cancel a project’s registration, withhold or invalidate CCC issuance, and issue corrective action requests where validation or verification identifies noncompliance with methodologies, MRV rules, or sustainable-development safeguards. ACVAs may be suspended or de-accredited for improper validation or verification conduct. For noncompliance with GEI targets under the CCTS compliance mechanism, the CPCB imposes environmental compensation on obligated entities equal to twice the average price of CCCs traded in the relevant compliance year, payable within 90 days, with funds held in a dedicated account for use under the CCTS as specified in the GEI rules. Any violation of these rules is dealt with under the Environment (Protection) Act, 1986.⁴³
Voluntary Use (Corporate Claims): For voluntary use of offset-CCCs, India does not have a dedicated carbon-claims law. Integrity is maintained through (1) mandatory retirement in the ICM registry for any voluntary claim, and (2) applicable corporate disclosure and consumer-protection frameworks. Listed entities must disclose climate action, including carbon credit use, through SEBI’s BRSR⁴⁴ and may undergo limited assurance under BRSR Core. Misleading, false, or overstated environmental claims fall under the Consumer Protection Act, 2019, and the relevant Advertising Standards Council of India green-claims guidelines. However, India has not established a specific enforcement mechanism for voluntary carbon claims akin to the European Union or VCMI frameworks.

B. Corporate Use Requirements

Mitigation Hierarchy: India’s offset mechanism encourages entities to prioritize direct emissions reductions before purchasing carbon credits, reflecting guidance issued during BEE stakeholder consultations and consistent with international good practice. However, India has no legally binding mitigation hierarchy for voluntary buyers. Companies may use offset-CCCs for residual emissions at their discretion, provided retirements are transparently recorded in the ICM registry and disclosed in corporate sustainability reporting.
Scope Coverage: There are no sector-specific or Scope 1, Scope 2, or Scope 3 restrictions on the use of offset-CCCs for voluntary claims. Corporations may apply retired credits to any emission source within their climate strategy, subject to disclosure obligations. Scope requirements apply only to the compliance mechanism, which covers facility-level Scope 1 and Scope 2 emissions based on sectoral GEI targets.
Quality Standards: Offset-CCCs used by corporates must originate from projects validated and verified under BEE-approved methodologies and issued through the ICM registry, which ensures exclusive serialization and prevents double counting. India has no mandatory third-party credit-quality labels (e.g., Integrity Council for the Voluntary Carbon Market and VCMI) for voluntary buyers. Listed companies may be subject to broader ESG expectations through SEBI’s BRSR and BRSR Core, but SEBI does not prescribe quality standards for carbon credits.
Accounting Treatment: The ICM registry, operated by GCIL, is the sole official ledger for offset-CCC issuance, transfer, cancellation, and retirement. A CCC may only be claimed against a corporate climate goal if it has been retired (voluntary use) or canceled for international transfer. Companies’ internal emissions accounting must reconcile with ICM registry records, particularly for listed firms reporting under SEBI’s BRSR environmental indicators, where misstatements may attract assurance-level scrutiny under BRSR Core.⁴⁵

C. Transparency and Assurance

Public Reporting: The ICM registry, operated by GCIL, provides the authoritative digital record of issuance, transfer, cancellation, and retirement of CCCs, including offset-CCCs. For voluntary use, retirement is required for any credible claim of offsetting, and all retirements are logged in the registry. However, public disclosure of the identity of the buyer or user is not mandatory, except where entities elect to disclose this information or are subject to corporate reporting obligations under SEBI’s BRSR⁴⁶ and BRSR Core for listed companies. India does not currently mandate public reporting of voluntary offset use for unlisted companies. Registry-level data (issuance, serialization, retirement, cancellation) is maintained to ensure traceability and prevent double counting, and Article 6 authorization and corresponding adjustment modules will further enhance transparency as they become operational.
Third-Party Verification: India does not impose a separate use-side auditor requirement for buyers of offset-CCCs. Assurance for corporate claims instead relies on the BRSR Core assurance framework for listed entities and would also rely on exchange-level surveillance if offset-CCCs are traded on a regulated exchange in the future. Verification of project-level emissions reductions or removals is conducted by ACVAs in accordance with ISO 14065:2020 and ISO 17029 under BEE’s offset mechanism rules,⁴⁷ but this applies to project issuance, not to corporate users.
Science-Based Targets: There are none.
Policy Advocacy: There are no mandatory buy-side requirements for offset volume, sector, or use intentions.

D. Market Integrity Protection

Anti-Greenwashing: This includes single-registry control with unique serials. Double issuance is mitigated by exclusive registration—there is no dual registration under another scheme, except India’s non-GHG Green Credit Programme (GCP), which issues credits for non-GHG environmental benefits rather than GHG reductions and therefore does not constitute double counting. Green credits under GCP are non-tradable and operate under a separate registry (Indian Council of Forestry Research and Education) managed by the MoEFCC. Green credits have fundamentally different uses, primarily for compensatory afforestation and corporate social responsibility compliance under the Environment (Protection) Act, 1986, and cannot be commercially traded like CCCs.⁴⁸ Green credits do not fall under the ambit of PCCMs governed by the CCTS.
Co-Benefits Delivery: No regulatory requirement has been established for buyers or users to demonstrate co-benefit delivery. All SDG, community, and biodiversity benefits must be documented in the project phase during offset issuance.

III. Market-Side Regulations

A. Infrastructure Framework

Market Structure:
Under the CCTS, India is establishing ICM as the national framework for trading CCCs. On February 27, 2026, CERC notified the Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026, which came into force upon publication in the official gazette.⁴⁹ The regulations provide that CCCs are to be dealt with through power exchanges, with any alternative mode requiring a separate order of CERC under the CCTS. They also provide for two separate market segments: a compliance market for obligated entities and an offset market for non-obligated entities.
Once operational, CCC trading is expected to occur on India’s recognized power exchanges (currently including the Indian Energy Exchange [IEX], Power Exchange India Limited [PXIL],⁵⁰ and Hindustan Power Exchange [HPX]) in separate market segments for obligated entities (compliance CCCs) and non-obligated entities (offset-CCCs). Currently, there is a lack of accredited verifiers in the ecosystem. Also, the final version of market infrastructure and registry systems is still being finalized, and CCC trading has not yet commenced, with first trades anticipated in 2026.
Market-Side Rules: The CCTS provides the primary legal basis for CCC issuance and trading, while the CERC (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,⁵¹ provide the market-side framework. Key features include the following: registration and interface procedures to be set out in the detailed transaction procedure formulated by BEE and approved by CERC; dealing in CCCs only through power exchanges unless otherwise specifically permitted by the commission by order; separate compliance and offset market segments; monthly transaction frequency or such other periodicity as approved by the commission; prior CERC approval of exchange rules, business rules, and bylaws, including eligibility criteria and price-discovery mechanisms; prohibition on sale bids in excess of available CCC holdings in the registry; and reporting of executed transactions to the registry so that seller and buyer accounts can be updated after each successful trade.
Registry Operations: GCIL is designated as the ICM registry operator for all CCCs under the CCTS. GCIL maintains the electronic ledger for CCC issuance, transfer, cancellation, banking, and retirement, ensuring one-to-one life cycle traceability for each certificate. CERC CCC Regulations, 2026, and BEE’s ICM design documents specify that
registry accounts must be opened for obligated and non-obligated entities;
CCC holdings in the registry are cross-checked against orders placed on power exchanges so that entities cannot sell more CCCs than they hold;
after each successful trade, GCIL updates the seller’s and buyer’s registry accounts accordingly; and
under the compliance mechanism,⁵² remaining CCCs from a compliance year may be banked for use in subsequent compliance years. Under the offset mechanism,⁵³ issued CCCs in a non-obligated entity’s account may have the status active, retired, or canceled; retirement denotes use in a claim, while cancellation denotes permanent removal from circulation by the administrator. The GCIL central registry records all CCC issuance, transfers, retirements, or cancellations and ensures one-to-one credit life cycle traceability. Registry integration with exchanges ensures that CCC sales and purchase requests are matched against actual holdings.⁵⁴ Public access includes credit issuance and trade data, but not always end-user identity or voluntary retirements.
Data Standards: Registry and exchange data requirements are being refined in the CERC regulations; CCC tracking is serial-numbered and digitally tracked at project or issuance and the retirement levels.

B. Trading and Participation

Eligibility Rules: Under the notified CERC CCC Regulations, 2026, obligated and non-obligated entities may participate in CCC dealings through the registry-and-exchange framework established under the CCTS and the commission’s approved procedures.⁵⁵ BEE is required to formulate the detailed procedure for registration of obligated and non-obligated entities with the registry, while power exchanges or other permitted entities must require participant registration under their CERC-approved rules, business rules, and bylaws. There is no separate offset-trading license; offset-CCCs must first be issued under the detailed procedure for the offset mechanism before they may be placed for dealing.
Trading Mechanisms: The notified CERC CCC Regulations, 2026, establish exchange-based dealing in CCCs as the default rule.⁵⁶ Unless otherwise specifically permitted by the commission by order pursuant to the CCTS, CCCs are to be dealt with only through power exchanges (IEX, PXIL, HPX)⁵⁷ and not in any other manner. The regulations create two separate market segments, the compliance market and the offset market, and provide that the frequency of transactions shall be monthly or such other periodicity as approved by the commission. The market-side framework is therefore now legally in place, though live trading remains contingent on approved transaction procedures, exchange business rules and bylaws, and operational readiness of the registry-exchange interface.
Settlement Systems: Because the CCC market is being built on the same chassis as power or renewable energy certificate (REC) markets, settlement mirrors those structures:
Clearing and Settlement: Trades on exchanges will be cleared through the clearing corporations associated with each exchange (e.g., those already used for REC or power contracts). Financial settlement is expected on T+1 or T+2 terms (i.e., one or two business days after the trade date), with margin requirements similar to existing energy products.⁵⁸
Physical Settlement Is Equivalent to Registry Transfer: After trade confirmation and financial settlement, the exchange sends a trade file to the GCIL registry; GCIL debits CCCs from the seller’s registry account and credits CCCs to the buyer’s account, ensuring that no one can sell more CCCs than they actually hold.
For Offset-CCCs: The same settlement logic applies; the only difference is that these CCCs originate from offset mechanism projects rather than compliance over-performance. For retirement (voluntary use) or cancellation (e.g., Article 6 international transfer), registry procedures under the offset procedure govern how units are extinguished after settlement.
Price Discovery: Under the notified CERC CCC Regulations, 2026,⁵⁹ the market price of CCCs is to be discovered at the respective power exchange, or any other permitted entity, through the process approved by the commission. For CCCs under the compliance mechanism, trading must occur within the price range―bounded by a floor price and a price cap―specified by CERC on a proposal submitted by BEE. CERC may also issue directions where it observes abnormal increases or decreases in CCC prices, sudden volatility, or sudden high or low dealing volumes. The detailed trading format will therefore be governed through approved exchange rules and business rules rather than fully specified in the regulations themselves.
Oversight Authority: CERC is the apex trading regulator. It licenses exchanges, sets substantive rules, approves exchange business rules, and can order suspension or investigation of trading. GCIL manages the registry and linkage with exchanges. BEE is the scheme administrator that oversees scheme design and project-level rules under CCTS. SEBI (indirect role)⁶⁰ does not regulate CCC trading but oversees listed companies’ disclosures (including any CCC use) under BRSR or BRSR Core.
Legal Classification: CCCs issued under CCTS are government-issued certificates digitally assigned through the ICM registry, each representing 1 tCO₂e of verified emission reduction, removal, or avoidance. Both compliance-driven CCCs and voluntary-use (project-based) CCCs issued under the offset mechanism derive their legal authority from the Energy Conservation Act, 2001 (as amended in 2022)⁶¹ and the CCTS notification,⁶² which formally defines CCCs and authorizes their issuance, transfer, banking, and retirement within the ICM. While both types of CCCs share identical legal status, their permitted uses differ: Offset-CCCs currently operate exclusively in voluntary and Article 6 pathways and are not eligible for compliance use under the CCTS.

For project-based CCCs (offset-CCCs), entities generally treat credits as inventory when held for sale in the ordinary course of business (aligned with Indian Accounting Standards [Ind AS] 2, which covers inventories), or as intangible assets when held for future strategic use and not intended for resale (aligned with Ind AS 38, which covers intangible assets).⁶³

India currently has no dedicated accounting standard for CCCs under either Ind AS or International Financial Reporting Standards (IFRS). Accounting practice, therefore, follows the earlier Institute of Chartered Accountants of India Guidance Note on Accounting for Self-Generated Certified Emission Reductions and general principles under Ind AS 2, Ind AS 38, Ind AS 115 (Revenue from Contracts with Customers), and their IFRS equivalents.

C. Market Integrity Safeguards

Anti-Manipulation and Fraud Prevention: Under the notified CERC CCC Regulations, 2026, obligated and non-obligated entities may not place sale bids in excess of the CCCs held in their registry accounts.⁶⁴ The registry must cross-check cumulative sale bids across power exchanges or any permitted entity against available holdings. Where a breach is detected, the entity is treated as a defaulter, and the bid is not considered for price discovery and becomes void if cumulative sale bids exceed available holdings. Entities with more than three such defaults in a quarter are barred from dealing in CCCs for the next six months, and the registry must publish the list of such defaulting entities monthly. More broadly, CERC, assisted by BEE, exercises market oversight over CCC dealing in accordance with the power market regulations.
Transparency and Reporting Requirements: CCC trading, once operational, must occur on CERC-approved power exchanges, which are obligated to publish market data in accordance with CERC regulations.⁶⁵ These requirements include the disclosure of trading volumes, clearing prices, bid or ask information, market depth, and turnover, as well as periodic reporting of detailed trade data to CERC and the GCIL registry for surveillance and audit. Buyer identity for voluntary use of offset-CCCs is not universally disclosed unless required under SEBI’s BRSR or BRSR Core⁶⁶ reporting obligations for listed companies or under future Article 6 transparency modules.

D. Financial and Cross-Border Integration

Financial Regulation Integration: All cash settlement and trading activities must comply with national financial and anti-money-laundering laws. CERC will oversee trading conduct on power exchanges.
Cross-Border Trading Framework: India has established the institutional basis for international transfers of carbon credits under Article 6.2 of the Paris Agreement through the designation of NDAIAPA⁶⁷ within MoEFCC. International transfer of CCCs is permitted only for credits explicitly authorized by MoEFCC and subject to corresponding adjustments to India’s NDC. Registry-level operationalization of Article 6.2 requires upgrades to the ICM registry operated by GCIL to include modules for authorization, first transfer, international transfer tracking, and corresponding adjustment accounting. As of early 2026, India’s Article 6 framework is institutionally in place, but international transfer of CCCs is not yet fully operationalized. MoEFCC, through NDAIAPA, governs authorization and corresponding adjustments, while BEE administers the relevant ICM portal workflow for eligible projects.

E. Regulatory Advancement Development Road Map

Infrastructure Plans: India is finalizing registry-exchange integration and digital onboarding systems for rollout under the notified CERC CCC Regulations, 2026.⁶⁸ The next implementation steps are approval of detailed transaction procedures, exchange business rules, and bylaws, and completion of operational readiness for live CCC trading.
International Cooperation: India has established the institutional architecture for participation in Article 6 of the Paris Agreement through the notification of the National Designated Authority for Article 6 (NDAIAPA)⁶⁹ and the publication of activity lists eligible for cooperative approaches under Articles 6.2 and 6.4. Registry upgrades for Article 6.2 authorization, first transfer, and corresponding adjustments are underway, supporting future bilateral trading arrangements led by MoEFCC.⁷⁰ India’s plans going forward include operationalizing authorization procedures, defining corresponding adjustment workflows, and integrating these functions into the ICM portal and registry.⁷¹ The ICM portal is being developed to include technical modules for Article 6.2 authorization, tracking, and reporting, enabling registry-level interoperability for bilateral crediting arrangements such as the India-Japan Joint Crediting Mechanism signed in August 2025 and future cooperative approaches.

Regulatory Evolution: Additional contract types and limited over-the-counter options may be introduced in later phases, subject to CERC rulemaking and observed market performance.
Enforcement Enhancement: CERC and GCIL will increase digital market conduct surveillance; new penalties and compliance assurance upgrades are expected in the transition to full national implementation.

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Ibid. ↩
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Carbon Wire, “India Enhances ESG Reporting Framework with Green Credit Disclosures,” March 31, 2025, https://carbonwire.org/carbon-initiatives/india-enhances-esg-reporting-framework-with-green-credit-disclosures/. ↩
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Ibid. ↩
Ibid. ↩
Bureau of Energy Efficiency, Ministry of Power, Detailed Procedure for Offset Mechanism Under Carbon Credit Trading Scheme (Version 1.0), Government of India, Section 8.2, March 27, 2025, https://beeindia.gov.in/sites/default/files/Detailed%20Procedure%20for%20Offset%20Mechanism_CCTS.pdf. ↩
Mongabay India, “Green Credit Rules Tweaked to Favour Canopy Cover, Remove Trade Provision,” September 3, 2025, https://india.mongabay.com/2025/09/green-credit-rules-tweaked-to-favour-canopy-cover-remove-trade-provision/. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
Power Exchange India Limited, “Comments on the Draft Terms and Conditions for Purchase and Sale of Carbon Credit Certificates Regulations,” Central Electricity Regulatory Commission, December 2024, https://www.cercind.gov.in/2024/draft_reg/CCC-2024/Comments/Power%20Exchange%20India%20Limited.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
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Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024,” draft, November 2024, https://cercind.gov.in/2024/draft_reg/DN-PoCCC-2024.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
Ibid. ↩
Power Exchange India Limited, “PXIL Suggestions and Observations on Draft Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024,” December 27, 2024, https://www.cercind.gov.in/2024/draft_reg/CCC-2024/Comments/Power%20Exchange%20India%20Limited.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024,” draft, November 2024, https://cercind.gov.in/2024/draft_reg/DN-PoCCC-2024.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
Securities and Exchange Board of India, “Measures to Facilitate Ease of Doing Business with Respect to Framework for Assurance or Assessment of ESG Disclosures for Value Chain and Introduction of Voluntary Disclosure on Green Credits,” Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/28, March 28, 2025, https://www.sebi.gov.in/legal/circulars/mar-2025/measures-to-facilitate-ease-of-doing-business-with-respect-to-framework-for-assurance-or-assessment-esg-disclosures-for-value-chain-and-introduction-of-voluntary-disclosure-on-green-credits_93102.html. ↩
Government of India, “The Energy Conservation (Amendment) Act, 2022,” “Act No. 19” of 2022, Section 14(w), The Gazette of India, December 19, 2022, https://powermin.gov.in/sites/default/files/The_Energy_Conservation_Amendment_Act_2022_0.pdf. ↩
Government of India, Lok Sabha, “Annex to Unstarred Question No. 134,” Annex No. 184, accessed April 13, 2026, https://sansad.in/getFile/loksabhaquestions/annex/184/AU134_F1dfZb.pdf?source=pqals. ↩
KPMG India, “Carbon Markets and Accounting for Carbon Credits Under Ind AS and IFRS,” KPMG Insights, 2024, https://assets.kpmg.com/content/dam/kpmg/in/pdf/2023/10/october-2023-aau-accounting-and-auditing-updates.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2024,” draft, November 2024, https://cercind.gov.in/2024/draft_reg/DN-PoCCC-2024.pdf. ↩
Securities and Exchange Board of India, “Measures to Facilitate Ease of Doing Business with Respect to Framework for Assurance or Assessment of ESG Disclosures for Value Chain and Introduction of Voluntary Disclosure on Green Credits,” Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2025/28, March 28, 2025, https://www.sebi.gov.in/legal/circulars/mar-2025/measures-to-facilitate-ease-of-doing-business-with-respect-to-framework-for-assurance-or-assessment-esg-disclosures-for-value-chain-and-introduction-of-voluntary-disclosure-on-green-credits_93102.html. ↩
Government of India, Ministry of Environment, Forest and Climate Change, “National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA)—Office Memorandum,” September 2025, https://ca1-aip.edcdn.com/S1-2_MOEFCC-Engagement_in_Article_6_of_Paris_Agreement_v3.pdf. ↩
Central Electricity Regulatory Commission, “Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026,” Notification No. RA-14026(13)/1/2024-CERC, New Delhi, February 27, 2026, effective upon publication in the official gazette, https://cercind.gov.in/regulations/205-Noti.pdf. ↩
Government of India, Ministry of Environment, Forest and Climate Change, “National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA)—Office Memorandum,” September 2025, https://ca1-aip.edcdn.com/S1-2_MOEFCC-Engagement_in_Article_6_of_Paris_Agreement_v3.pdf. ↩
Ibid. ↩
Carbon Pulse, “India Prepares Portal for Cross-Border Trading as Article 6.2 Implementation Advances,” October 7, 2025, https://carbon-pulse.com/443062/. ↩