The government of India has plans to start a carbon credit market in the energy, steel and cement sectors in an aim to speed up energy transition and climate action. Carbon markets let investors and companies trade carbon credits and carbon offsets. It is a tool to counteract the environmental crisis, while at the same time boosting the economy.
The platform is expected to be announced on Aug.15 – the country’s Independence Day – by PM Narendra Modi. The work on the carbon credit market started back in March 2022 as a collaboration between industry and government.
The platform will initially include only hard-to-abate industry players who will be able to trade credits earned from decreasing emissions. Among the participants that can benefit from carbon-capture investments are state companies like Oil & Natural Gas Corp., Indian Oil Corp. and NTPC Ltd., and firms in the steel and cement sectors.
India is currently third in the world in terms of emissions and said during the COP26 summit 2021 that it plans to reach net zero by 2070. The first step in reaching this target is decreasing emissions by 1 billion tons by the end of the decade. India faces greater environmental challenges than China, which has set its net-zero targets for 2060.
Similarly to India, last year China proposed a mandatory trading system for all its big power sites. It has since, however, faced challenges such as problems with the collection of data and unclear buying and selling of allowances.
India will reportedly be ready with the details on the proposed carbon market in Q4 of 2022. Methanol-blended fuels for land and sea transportation, an increased number of CO2 capture projects and a boost toward the adoption of electric vehicles are all included the country’s climate plans.