Key Terms & Concepts — UPSC Mains
Carbon Credit Trading Scheme (CCTS)
"India's compliance carbon market under the Energy Conservation Act; binding emission-intensity targets for energy-intensive sectors took effect from FY2026, with first trading expected during 2026."
The Carbon Credit Trading Scheme is India's national compliance carbon market, established in 2023 under the Energy Conservation (Amendment) Act, 2022. Administered by the Bureau of Energy Efficiency under the Ministry of Power, with the Grid Controller of India as the registry, it sets legally binding greenhouse-gas emission-intensity targets for energy-intensive industries. Obligated entities that beat their targets earn carbon credit certificates tradable to those that fall short. The first seven sectors (aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals, textiles) transitioned from the earlier Perform-Achieve-Trade scheme, with targets for compliance years FY2026 and FY2027 using FY2024 as the baseline and the first trading expected during 2026.
GS3 (environment, economy, climate change). Prelims: under the Energy Conservation Act, BEE administers, evolves from the PAT scheme, carbon credit certificates, intensity-based targets. Mains: market-based instruments for decarbonisation and meeting India's NDC and net-zero-by-2070 goals.
- 1 Notified in 2023 under the Energy Conservation (Amendment) Act, 2022
- 2 Administered by the Bureau of Energy Efficiency, Ministry of Power
- 3 Registry maintained by the Grid Controller of India
- 4 Sets binding emission-intensity targets, not absolute caps
- 5 Evolves from the Perform-Achieve-Trade (PAT) scheme
- 6 Seven sectors transitioned from FY2026: aluminium, cement, chlor-alkali, pulp and paper, refining, petrochemicals, textiles
- 7 Roughly 490 to 740 entities to be covered as sectors are notified
- 8 Baseline year FY2024; binding targets for FY2026 and FY2027
- 9 First carbon credit certificate trading expected during 2026
- 10 Supports India's NDC and the net-zero-by-2070 commitment
From FY2026, seven energy-intensive sectors began operating under legally binding emission-intensity targets in India's Carbon Credit Trading Scheme, with the first credit trades expected during 2026.
