With its aim to deepen India's carbon credit market by welcoming 'non-obligated entities' into the fray, the revamped CCTS promises to transform the country's carbon credit landscape
In a significant move, the Ministry of Power has introduced pivotal amendments to the Carbon Credits Trading Scheme (CCTS), marking a significant leap towards establishing India's independent standards for carbon trading. The amendments, announced in a recent notification, hold the potential to reshape the nation's carbon credit landscape.
The directive tasks the Bureau of Energy Efficiency (BEE), the carbon credits administrator, with developing standards and registering projects under an offset mechanism.
Notably, the bureau is now entrusted with the crucial task of "validating " carbon credits, expanding its role from the initial "verification" mandate outlined in the June 28 notification.
The revamped CCTS aims to deepen India's carbon credit market by welcoming 'non-obligated entities' into the fray. Formerly limited to purchasing credits, these entities—unbound by legal obligations to limit their carbon footprint—can now register decarbonisation projects and actively contribute to generating carbon credits.
The non-obligated entities can register their projects as per the published sectoral methodologies for greenhouse gas emission reduction, removal, or avoidance for seeking issuance of Carbon Credit Certificates.
The amendment introduces an "offset mechanism" to empower non-obligated entities in credit generation. This mechanism allows the concerned entities to register projects, accounting for greenhouse gas emission reduction, removal, or avoidance, leading to the issuance of Carbon Credit Certificates.
Crucially, the amendment places the onus on the BEE to identify sectoral scope and methodologies under the offset mechanism, with support from respective technical committees. This move signifies a departure from the conventional route where Indian entities had to resort to overseas standards agencies to validate their carbon credits, incurring significant costs and time delays.
Industry experts lauded the amendments, emphasising that having indigenous standards would alleviate the burden on Indian carbon credit generators. The experts noted that even foreign decarbonisation projects might choose India for certification once the BEE establishes the requisite standards.