Empowering India’s Carbon Credit Market

Carbon credit is an offset solution that compensates for the emission of carbon dioxide emissions into the atmosphere by preventing or reducing the same amount of carbon dioxide from entering the atmosphere elsewhere on earth through green projects/initiatives.

India has accumulated carbon credits through its participation in the Clean Development Mechanism (CDM) projects. The abundance of CDM projects mean India has been one of the largest recipients of tradable Certified Emission Reduction (CER) credits. The CDM and CER together has helped India in laying the groundwork for the development of a Voluntary Carbon Credit Market (VCM).

The now proposed amendments to the Energy Conservation Act 2022 Act is now set to empower the development of India’s carbon market that will in turn enable the country to transition into a low carbon economy. With the proposed amendments, the current trading schemes in India – Energy Saving Certificates (ESCerts) and Renewable Energy Certificates (RECs) will be merged into one single commodity that will be called Carbon Credits Certificate (CCC) and will operate under Cap & Trade system under the National ETS.

Carbon Markets Association of India and our consortium of industry experts aims to enable this growth of India’s carbon credit market with concrete measures to overcome industry challenges even as we consistently work towards increasing industry participation for policy advocacy and framework guidelines. A robust market will ensure a steady flow of carbon credits and this would translate into more green projects in the country for increased mitigation of carbon dioxide from entering the atmosphere. Together, this will empower the country’s journey to net-zero.