This week, the government of India announced its own Carbon Credit Trading Scheme (CCTS) 2023.
Earlier this year, the nation’s Ministry of Power had taken a stance that a domestic carbon offset market would not be launched so soon in time.
As of December 19, 2023, the stance appears to have changed, as India’s Central Government and the Bureau of Energy Efficiency have made changes to the scheme, including its name, which henceforth is to be referred to as the Principal Scheme.
One of the most prominent changes made to the scheme is the inclusion of both carbon reduction and carbon dioxide removal (CDR) projects.
Certain obligated organizations and businesses will be provided with emissions reduction targets within the compliance mechanism, whereas non-obligated entities will be free to apply for the issuance of Carbon Credit Certificates in the offset mechanism by registering their respective removal, reduction or avoidance projects.
The compliance market is set to launch officially in 2026 and will encompass all the most hard-to-abate sectors, such as oil and gas, steel, aluminum, and others.
Some industry players have already expressed their support for the Carbon Credit Trading Scheme in India, such as Mr. Manish Dabkara, chairman and MD EKI Energy Services, who said:
“I am pleased to extend our warm welcome to the Government of India’s commendable initiative in amending the Carbon Credit Trading Scheme 2023, as announced in June 2023 by the Bureau of Energy Efficiency. The inclusion of the Offset Market and provision for non-obligated entities to participate in CCTS is a progressive step that will usher in new opportunities for Indian decarbonization project developers within the national carbon market.
However, for optimal participation, we urge the Bureau to promptly establish sectoral scopes, standards, and methodologies, drawing inspiration from well-established international practices.”