Archive · 13 Jun 2025
India Launches Carbon Credit Scheme: Concerns Over Targets and Scope
India is starting a new system called CCTS to help reduce pollution.
Companies in certain industries will be given goals for how much pollution they can make.
If they pollute less, they get credits; if they pollute more, they might have to pay.
This new system is replacing an older one and is only starting with a few industries.
Some people worry that the goals aren't strict enough to make a real difference or that the system will be complicated, especially when the power industry joins.
The success of this system will depend on setting effective targets and ensuring it works well for everyone.
India's carbon credit trading scheme (CCTS) targets for emission reduction were announced in April 2025.
The CCTS will replace the existing Perform, Achieve and Trade (PAT) scheme, with a shift from energy consumption to GHG emissions as the monitored parameter.
Initially, the CCTS covers only four sectors: cement, aluminum, pulp & paper, and chlor-alkali, encompassing 282 units.
Concerns exist about the modesty of the targets and potential for low carbon prices, mirroring issues in the PAT scheme.
The inclusion of the power sector, a major GHG emitter and a regulated cost-plus entity, presents complex challenges for CCTS implementation.
- Who
- The CCTS affects various industrial sectors and government regulatory bodies.
- What
- India's new carbon credit trading scheme (CCTS) to reduce GHG emissions.
- When
- Targets announced in April 2025; detailed procedures made public in July 2024.
- Where
- India.
- Why
- To reduce GHG emissions and potentially encourage a realistic carbon price.
Concerns
Expectations
Target Ambition
Concerns
Modest targets may lead to low carbon prices and ineffectiveness.
Expectations
Unspecified
Regulatory Conflicts
Concerns
Conflict may arise between the BEE and ERCs due to divergence in assumptions.
Expectations
Unspecified
- Scheme Name
- Carbon Credit Trading Scheme (CCTS)
- Predecessor
- Perform, Achieve and Trade (PAT) scheme
- Sectors Initially Covered
- Cement, aluminum, pulp & paper, and chlor-alkali
- Units Covered Initially
- 282
- Power Sector Emissions
- Around 40% of India's GHG emissions
- Penalty for Non-compliance
- Double the carbon price