**Executive Summary**
The document addresses the implementation of India's Carbon Market, specifically the Carbon Credit Trading Scheme (CCTS). It provides details on the scheme's mechanisms, the sectors involved, and the role of the National Designated Authority (NDA) in supporting the Paris Agreement goals. The compliance years are defined as 2025-26 and 2026-27, using fiscal year 2023-24 as the baseline.
**Key Points / Main Content**
* **National Framework for Indian Carbon Market (ICM) / Carbon Credit Trading Scheme (CCTS):**
* Established via notifications S.O. 2825(E) (June 28, 2023) and S.O. 5369(E) (December 19, 2023) under the Energy Conservation (Amendment) Act, 2022.
* Consists of two mechanisms: compliance and offset.
* **Compliance Mechanism:**
* Obligated entities must comply with Green House Gas emission reduction norms.
* Greenhouse Gas Emission Intensity Reduction (GEI) Targets are defined for seven sectors: Aluminum, Cement, Chlor-Alkali, Pulp & Paper, Petrochemicals, Petroleum refinery, and textiles.
* 490 obligated entities have been notified.
* Compliance years are 2025-26 and 2026-27, using fiscal year 2023-24 as the baseline.
* **Offset Mechanism:**
* Non-obligated entities can register projects for Green House Gas emission reduction/removal/avoidance to receive Carbon Credit Certificates (CCCs).
* Covers ten sectors: Energy, Industries, Agriculture, Waste handling and disposal, Forestry, Transport, Fugitive Emissions, Construction, Solvent use and Carbon capture and storage of CO2 and other removals.
* **National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA):**
* Notified via S.O.2504 (E) (May 30, 2022) and amended via G.S.R. 569 (E) (August 22, 2025).
* Aims to operationalize Article 6 mechanisms of the Paris Agreement.
* Finalized a list of 13 eligible activities for international carbon credit trading under Article 6.2 and 6.4.
**Impact Analysis**
**Obligated Entities (within the 7 sectors identified in the Compliance Mechanism):**
*Impact:* Must comply with prescribed Green House Gas emission reduction norms for 2025-26 and 2026-27 using 2023-24 as the baseline.
*Action Required:* Implement measures to meet Greenhouse Gas Emission Intensity Reduction (GEI) Targets.
**Non-Obligated Entities:**
*Impact:* Can register projects for Green House Gas emission reduction, removal, or avoidance to obtain Carbon Credit Certificates (CCCs).
*Action Required:* Register eligible projects under the offset mechanism.
**National Designated Authority (NDA):**
*Impact:* Strengthens India's position in global climate negotiations by operationalizing Article 6 of the Paris Agreement.
*Action Required:* Continue implementing and overseeing the updated list of 13 activities for international carbon credit trading.
Key Entities Referenced
Carbon Credit Trading Scheme (CCTS): National Framework for Indian Carbon Market, defining compliance and offset mechanisms for carbon emission reduction.
Energy Conservation (Amendment) Act, 2022: Act that empowers the implementation of the Carbon Credit Trading Scheme.
National Designated Authority for the Implementation of Article 6 of the Paris Agreement (NDAIAPA): Authority responsible for operationalizing Article 6 mechanisms of the Paris Agreement.
Ministry of Environment, Forest and Climate Change: The ministry responsible for matters related to carbon markets and climate change.
Paris Agreement: Referenced for its Article 6, concerning cooperative approaches to climate change mitigation and trading of international carbon credits.
GOVERNMENT OF INDIA
MINISTRY OF ENVIRONMENT, FOREST AND CLIMATE CHANGE
LOK SABHA
UNSTARRED QUESTION NO. 336
TO BE ANSWERED ON 02.02.2026
National Designated Authority for Carbon Credit Market
336. SHRI DUSHYANT SINGH:
Will the Minister of ENVIRONMENT, FOREST AND CLIMATE CHANGE be pleased to
state:
(a) whether the Government has envisaged any specific timeline to operationalise India’s
first Carbon Market, if so, the details thereof including the expected impact on emission
reduction;
(b) the details of the sectors proposed to be brought under the aforesaid mechanism and the
manner in which their inclusion is being prioritised;
(c) whether the Government has recently reconstituted the National Designated Authority
(NDA) in pursuance of the launch of India’s first carbon market; and
(d) if so, the details thereof including its expanded composition and the manner in which
this reconstitution is expected to strengthen India’s position in global climate
negotiations, particularly in view of India’s proposal to host 33rd Conference of Parties
of United Nations Framework Convention on Climate Change (CoP-33) in 2028?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF ENVIRONMENT, FOREST AND
CLIMATE CHANGE
(SHRI KIRTI VARDHAN SINGH)
(a) & (b): The ‘National Framework for Indian Carbon Market (ICM) i.e. Carbon Credit
Trading Scheme (CCTS) was notified vide S.O. 2825 (E) dated 28th June 2023 and amendment
notification S.O. 5369(E), dated 19th December 2023 under the powers conferred by clause
(w) of section 14 of the Energy Conservation (Amendment) Act, 2022.
The scheme defines two mechanisms, namely, compliance mechanism and offset mechanism.
In the compliance mechanism, the obligated entities shall comply with the prescribed Green
House Gas emission reduction norms in each compliance cycle of Carbon Credit Trading
Scheme (CCTS). Under this mechanism, the Greenhouse Gas Emission Intensity Reduction
(GEI) Targets for seven sectors - Aluminum, Cement, Chlor-Alkali, Pulp & Paper,
Petrochemicals, Petroleum refinery and textiles covering 490 obligated entities have been
notified by the Central Government for the compliance years 2025-26 and 2026-27, using fiscal
year 2023-24 as the baseline.In the offset mechanism, the non-obligated entities can register their projects for Green House
Gas emission reduction or removal or avoidance for issuance of Carbon Credit Certificate
(CCCs). Under this mechanism, the government has approved ten sectors, which include
Energy, Industries, Agriculture, Waste handling and disposal, Forestry, Transport, Fugitive
Emissions, Construction, Solvent use and Carbon capture and storage of CO2 and other
removals.
(c) & (d) The Government has also notified the National Designated Authority for the
Implementation of Article 6 of the Paris Agreement (NDAIAPA), vide S.O.2504 (E), dated
30th May, 2022 and subsequent amendment (vide G.S.R. 569 (E)) dated 22nd Aug 2025, to
ensure effective operationalization of Article 6 mechanisms of the Paris Agreement. The
Authority has updated and finalized the list of 13 activities under Green House Gas (GHG)
mitigation, alternate materials, and removal activities, which are eligible for trading of
international carbon credits under bilateral/ cooperative approaches, under Article 6.2 and
Article 6.4 of the Paris Agreement.
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