**Summary:**
In response to parliamentary questions regarding the establishment and operation of voluntary carbon markets in India, the Ministry of Power outlines the framework established through the Carbon Credit Trading Scheme (CCTS). The CCTS encompasses both a compliance mechanism for emission-intensive industries ("Obligated Entities") mandated to meet Greenhouse Gas Emission Intensity (GEI) targets, and an offset mechanism allowing non-obligated entities to register emission reduction projects for Carbon Credit Certificate issuance. Detailed procedures, including a Measurement, Reporting, and Verification (MRV) framework, have been published to ensure accurate and transparent compliance. The Government of India has specified the baseline year, emission factors, and eligible sectors for carbon credit issuance. Draft notifications specifying GEI targets across eight sectors (Pulp & Paper, Aluminium, Cement, Chlor-Alkali, Iron & Steel, Petroleum Refinery, Petrochemicals, and Textile) have been published, along with eight methodologies for offset mechanism project activities. While the CCTS procedures align with global standards, decisions regarding cross-border transfer or trading of Carbon Credit Certificates will be determined by the National Designated Authority for Implementation of Article 6 of the Paris Agreement (NDAIAPA) based on evolving requirements.
Key Entities Referenced
Voluntary Carbon Markets: A market-based system where carbon credits are generated from projects that voluntarily reduce or remove greenhouse gas (GHG) emissions.
Indian Carbon Market: A domestic framework for carbon trading in India, aiming to reduce greenhouse gas emissions across various sectors.
Carbon Credit Trading Scheme (CCTS): A scheme notified by the Central Government of India that defines compliance and offset mechanisms for carbon trading.
Greenhouse Gas Emission Intensity (GEI): Targets assigned to emission-intensive industries, also known as 'Obligated Entities', under the compliance mechanism of the CCTS.
Carbon Credit Certificates: Certificates issued to non-obligated entities for projects that reduce, remove, or avoid greenhouse gas emissions under the offset mechanism.
Measurement, Reporting, and Verification (MRV): A framework to ensure accurate, transparent, and credible compliance with carbon reduction targets within the CCTS.
Bureau of Energy Efficiency (BEE): An agency in consultation with central government for CCTS.
National Designated Authority for Implementation of Article 6 of Paris Agreement (NDAIAPA): Authority responsible for decisions regarding cross-border transfer or trading of Carbon Credit Certificates.
GOVERNMENT OF INDIA
MINISTRY OF POWER
LOK SABHA
UNSTARRED QUESTION NO.2021
ANSWERED ON 31.07.2025
GUIDELINES FOR OPERATION OF VOLUNTARY CARBON MARKETS
2021. SHRI B K PARTHASARATHI:
SHRI MOHIBBULLAH:
Will the Minister of POWER
be pleased to state:
(a) whether the Government has issued/established any legal framework or
guidelines for the operation of voluntary carbon markets in the country;
(b) if so, the details thereof and if not, the reasons therefor;
(c) whether the Government has set up a unified set of rules, accounting protocols
and verification mechanisms applicable across all sectors under the Indian Carbon
Market framework;
(d) if so, the details thereof and if not, the reasons therefor;
(e) whether the Government has specified critical components such as the baseline
year, emission factors and the types of eligible projects under various sectors for the
issuance of carbon credits;
(f) if so, the details thereof and if not, the reasons therefor;
(g) whether the Government has formulated or is considering any plans to align
India’s carbon market with international standards or global carbon markets to ensure
compatibility and enable cross-border credit transfer or trading; and
(h) if so, the details thereof and if not, the reasons therefor?
A N S W E R
THE MINISTER OF STATE IN THE MINISTRY OF POWER
(SHRI SHRIPAD NAIK)
(a) to (d) : The Central Government in consultation with Bureau of Energy Efficiency
(BEE) notified Carbon Credit Trading Scheme (CCTS) which defines two mechanism
namely – compliance mechanism and offset mechanism.
Under the compliance mechanism, emission-intensive industries designated as
'Obligated Entities' are required to comply with the assigned Greenhouse Gas Emission
Intensity (GEI) targets. Under the offset mechanism, non-obligated entities may register
their projects aimed at greenhouse gas emission reduction, removal, or avoidance for
the purpose of seeking issuance of Carbon Credit Certificates. The detailed proceduresfor both the mechanism have already been published which cover Measurement,
Reporting, and Verification (MRV) framework to ensure accurate, transparent, and
credible compliance.
(e) & (f): The Government of India has already specified the baseline year, emission
factors and various sectors for the issuance of carbon credits. Draft notifications
specifying GEI targets for obligated entities across eight different sectors namely - Pulp
& Paper, Aluminium, Cement and Chlor-Alkali, Iron & Steel, Petroleum Refinery,
Petrochemicals and Textile have been published. Further, eight methodologies for
different project activities under offset mechanism have also been published.
(g) & (h): The aforesaid procedures, published for implementation of CCTS, are in
alignment with global standards. However, decisions regarding the cross-border
transfer or trading of Carbon Credit Certificates shall be taken by the National
Designated Authority for Implementation of Article 6 of Paris Agreement (NDAIAPA), as
per emerging requirements.
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