**Executive Summary**
This document summarizes the framework and operational details of the Indian Carbon Market (ICM) under the Carbon Credit Trading Scheme (CCTS), as answered in Lok Sabha Question No. 921 on February 5, 2026. It outlines the compliance and offset mechanisms, institutional arrangements, and the roles of various stakeholders in achieving national climate goals. The document also mentions the monitoring and review mechanisms in place to assess the effectiveness of the ICM.
**Key Points / Main Content**
* **Indian Carbon Market (ICM) Framework:**
* The ICM operates through two mechanisms: Compliance Mechanism and Offset Mechanism.
* Obligated Entities (emission-intensive industries) must meet assigned Greenhouse Gas Emission Intensity (GEI) targets under the Compliance Mechanism.
* Entities exceeding GEI targets receive Carbon Credit Certificates.
* Non-obligated entities can voluntarily register mitigation activities under the Offset Mechanism to seek Carbon Credit Certificates.
* **Institutional Arrangements:**
* Grid Controller of India Limited functions as the Registry for the ICM.
* The Central Electricity Regulatory Commission serves as the regulator for trading activities.
* GEI reduction targets have been set for seven energy-intensive sectors: Aluminium, Cement, Chlor-Alkali, Pulp & Paper, Petrochemicals, Petroleum Refinery, and Textiles, covering 490 obligated entities.
* **Offset Mechanism Methodologies:**
* Nine methodologies developed by the Bureau of Energy Efficiency are available under the offset mechanism. (Grid-connected electricity generation from renewable sources; Hydrogen production from electrolysis of water; Energy efficiency and fuel switching measures for industrial facilities; Hydrogen production using methane extracted from biogas; Landfill methane recovery; Flaring or use of landfill gas; Methane recovery from livestock and manure management at households and small farms; Afforestation and reforestation of degraded mangrove habitats; Afforestation and reforestation of lands except wetlands)
* **Roles and Responsibilities:**
* Industries and other stakeholders are expected to drive emissions reduction by improving efficiency, adopting low-carbon technologies, and meeting GEI targets.
* **Monitoring and Verification:**
* A structured Monitoring, Reporting, and Verification (MRV) framework is in place.
* The National Steering Committee for the Indian Carbon Market periodically reviews emissions-intensity targets.
* Procedures for accreditation of carbon verification agencies have been finalized.
**Impact Analysis**
**Obligated Entities (Energy-Intensive Industries)**
* **Impact:** Required to meet assigned Greenhouse Gas Emission Intensity (GEI) targets to comply with the Indian Carbon Market.
* **Action Required:** Implement measures to reduce emissions intensity, potentially invest in energy efficiency and low-carbon technologies, and participate in carbon credit trading.
**Non-Obligated Entities**
* **Impact:** Opportunity to voluntarily participate in the Indian Carbon Market by registering approved mitigation activities.
* **Action Required:** Voluntarily register mitigation activities and obtain Carbon Credit Certificates.
**Grid Controller of India Limited**
* **Impact:** Responsible for maintaining the registry of the Indian Carbon Market.
* **Action Required:** Maintain and operate the ICM registry.
**Central Electricity Regulatory Commission**
* **Impact:** Serves as the regulator for trading activities within the Indian Carbon Market.
* **Action Required:** Oversee and regulate carbon credit trading activities.
**National Steering Committee for Indian Carbon Market**
* **Impact:** Responsible for monitoring, reviewing, and assessing the effectiveness of the Indian Carbon Market.
* **Action Required:** Review and assess the MRV and emissions-intensity targets.
Key Entities Referenced
Indian Carbon Market (ICM): A framework launched to facilitate emission reduction and climate mitigation efforts, operating through the Compliance Mechanism and the Offset Mechanism.
Carbon Credit Trading Scheme (CCTS): The scheme under which the Indian Carbon Market (ICM) operates.
National Steering Committee for Indian Carbon Market: Responsible for the structured Monitoring, Reporting and Verification (MRV) framework and periodic review of emissions-intensity targets under the ICM.
Bureau of Energy Efficiency: Developed nine different methodologies under the offset mechanism for the Indian Carbon Market.
Central Electricity Regulatory Commission: Serves as the regulator for trading activities under the Indian Carbon Market (ICM).
GOVERNMENT OF INDIA
MINISTRY OF POWER
LOK SABHA
UNSTARRED QUESTION NO.921
ANSWERED ON 05.02.2026
EFFECTIVENESS OF CARBON MARKET
†921. SHRI MANISH JAISWAL:
DR. MANNA LAL RAWAT:
SHRI DAMODAR AGRAWAL:
SMT. SHOBHANABEN MAHENDRASINH BARAIYA:
SHRI PRAVEEN PATEL:
Will the Minister of POWER
be pleased to state:
(a) the salient features of the framework for the Indian Carbon Market launched to
facilitate emission reduction and climate mitigation efforts;
(b) the details of the progress made in establishing institutional arrangements such
as the carbon registry, trading mechanisms and sectoral coverage, State-wise;
(c) the role envisaged for industries and other stakeholders by participating in the
carbon market and towards achieving national climate goals;
(d) whether the Government has instituted any mechanism to assess the
effectiveness of the carbon market in driving emission reductions and facilitating
investment in clean technologies; and
(e) if so, the details thereof?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a) : The Indian Carbon Market (ICM) under the Carbon Credit Trading Scheme
(CCTS) operates through two mechanisms, namely the Compliance Mechanism and
the Offset Mechanism. Under the Compliance Mechanism, emission-intensive
industries notified as Obligated Entities are required to meet assigned Greenhouse
Gas Emission Intensity (GEI) targets, and entities that over-achieve their targets are
eligible for issuance of Carbon Credit Certificates. Under the Offset Mechanism Non-
obligated entities, may voluntarily register approved mitigation activities for the
purpose of seeking issuance of Carbon Credit Certificates.
(b) : The institutional framework required for the operationalization of the Indian
Carbon Market (ICM) is already in place. Grid Controller of India Limited is functioning
as the Registry, while the Central Electricity Regulatory Commission serves as the
regulator for trading activities under the ICM.
Under the compliance mechanism of ICM, the Central Government has notified
Greenhouse Gas Emission Intensity (GEI) reduction targets for seven energy-intensive
sectors—Aluminium, Cement, Chlor-Alkali, Pulp & Paper, Petrochemicals, Petroleum
Refinery, and Textiles. These targets cover 490 obligated entities, with detailed State-
wise information provided in Annexure-I.Under the offset mechanism, nine different methodologies (list Annexure-II)
have been developed by the Bureau of Energy Efficiency.
In addition, procedures for the accreditation of carbon verification agencies
have been finalized to ensure robust, transparent, and credible measurement,
reporting, and verification of emission reductions.
(c) : Industries and other stakeholders are envisaged to drive emissions reduction
under the ICM by improving efficiency, adopting low-carbon technologies, and meeting
notified emissions-intensity targets, as mentioned at reply to Part (a) above.
(d) & (e) : A structured Monitoring, Reporting and Verification (MRV) framework and
periodic review of emissions-intensity targets by the National Steering Committee for
Indian Carbon Market have already been envisaged for assessing the effectiveness of
the Indian Carbon Market.
************ANNEXURE-I
ANNEXURE REFERRED IN REPLY TO PART (b) OF UNSTARRED QUESTION NO.
921 ANSWERED IN THE LOK SABHA ON 05.02.2026
*************
Total number of Obligated
State
Entities
Andhra Pradesh 30
Assam 8
Bihar 4
Chhattisgarh 11
Dadra & Nagra 17
Gujarat 71
Haryana 9
Himachal Pradesh 14
Jammu & Kashmir 1
Jharkhand 7
Karnataka 22
Kerala 3
Madhya Pradesh 29
Maharashtra 29
Meghalaya 8
Odisha 18
Puducherry 2
Punjab 26
Rajasthan 64
Tamil Nadu 41
Telangana 21
Uttar Pradesh 34
Uttarakhand 6
West Bengal 15
Total 490
************ANNEXURE-II
ANNEXURE REFERRED IN REPLY TO PART (b) OF UNSTARRED QUESTION NO.
921 ANSWERED IN THE LOK SABHA ON 05.02.2026
*************
i. BM EN01.001: Grid-connected electricity generation from renewable
sources;
ii. BM EN01.002: Hydrogen production from electrolysis of water;
iii. BM IN02.001: Energy efficiency and fuel switching measures for industrial
facilities;
iv. BM IN02.002: Hydrogen production using methane extracted from biogas;
v. BM WA03.001: Landfill methane recovery;
vi. BM WA03.002: Flaring or use of landfill gas,
vii. BM AG04.002: Methane recovery from livestock and manure management
at households and small farms;
viii. BM FR05.001: Afforestation and reforestation of degraded mangrove
habitats;
ix. BM FR05.002 Afforestation and reforestation of lands except wetlands
***********