India’s Carbon Credit Trading Scheme (CCTS), notified under the Energy Conservation (Amendment) Act 2022, establishes the country’s first compliance carbon market. The scheme will cover major emitting sectors including power, iron and steel, cement, and petrochemicals.
CCTS differs from the EU ETS in important ways: it starts with intensity-based targets (emissions per unit of output) rather than absolute caps, and it includes provisions for both compliance entities and voluntary participants. The Bureau of Energy Efficiency (BEE) will administer the scheme.
For covered entities, CCTS means mandatory GHG monitoring, reporting, and verification (MRV). Companies that reduce emissions below their targets can sell surplus credits; those that exceed targets must purchase credits or face penalties.
RSustain has been preparing industrial clients for CCTS since the amendment was announced. Our services include GHG inventory development (aligned with CCTS MRV requirements), abatement opportunity assessment, and carbon market strategy advisory.
The intersection of CCTS and CBAM is particularly important for Indian exporters to Europe. Credits surrendered under CCTS may eventually be recognised as equivalent to EU ETS payments, reducing CBAM liabilities. Companies that participate in CCTS early may gain a trade advantage.