Bureau of Energy Efficiency (BEE), Ministry of Power (MoP), and Ministry of Environment, Forest and Climate Change (MoEFCC) plan to develop the Indian carbon market (ICM) where a national framework will be established with an objective to decarbonise the Indian economy by pricing the green house gas (GHG) emission through trading of the carbon credit certificates.
The new carbon credit trading scheme will enhance the energy transition efforts with an increased scope that will cover the potential energy sectors in India. For these sectors, GHG emissions intensity benchmark and targets will be developed, which will be aligned with India’s emissions trajectory as per climate goals. The trading of carbon credits will take place based on the performance against these sectoral trajectories. Further, it is envisaged that there will be a development of a voluntary mechanism concurrently, to encourage GHG reduction from non-obligated sectors. The ICM will develop methodologies for estimation of carbon emissions reductions and removals from various registered projects, and stipulate the required validation, registration, verification, and issuance processes to operationalise the scheme. The ICM will mobilise new mitigation opportunities through demand for emission credits by private and public entities.