The Union Ministry for Power is going to develop a Carbon Credit Trading Scheme (CCTS) for decarbonisation in partnership with the Ministry of Environment, Forests and Climate Change.

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Even as an Indian Carbon Market (ICM) is being developed to decarbonize the economy and greenhouse gas (GHG) emissions are being priced through trading of carbon credit certificates, the CCTS will aim at enhancing India's energy transition efforts by covering potential energy sectors.

GHG emissions intensity benchmarks and targets are also slated to be developed to align with India's emissions trajectory as per climate goals. The trading of carbon credits will take place based on performance against these sectoral trajectories, whereas a voluntary mechanism will be developed to encourage GHG reduction from non-obligated sectors.

Director General of the Bureau of Energy Efficiency (BEE), Abhay Bakre has said that an ICM will enable creation of a competitive market to provide incentives to climate actors to adopt low-cost options by attracting technology and finance towards sustainable projects that generate carbon credits.

The ICM will enable the creation of a competitive market that can provide incentives to climate actors to adopt low-cost options by attracting technology and finance towards sustainable projects that generate carbon credits.

Pointing out that ICM can also be a vehicle to mobilize a significant portion of investments required by the Indian economy to transition towards low-carbon pathways, Bakre added that specific guidance will be given to develop a MRV (measurement, reporting and verification) process for GHG emissions as well as define eligibility criteria for Accredited Carbon Verifiers (ACVs).

The ICM aims to develop methodologies for estimation of reduction in carbon emissions reductions, and for verification, registration, validation and issuance processes to operationalize the scheme.

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MRV guidelines for the emissions scheme will also be developed after consultation, and a comprehensive institutional and governance structure will be set up with specific roles of each party involved in the execution of the ICM.

The ICM will also intend to mobilise new mitigation opportunities through demand for emission credits by private and public entities. The Power Ministry feels that a well-designed and competitive carbon market mechanism will enable the reduction of GHG emissions at the least cost, both at the level of entity as well as the overall sector, and will drive faster adoption of clean technologies in India. The ICM aims to achieve the NDC goal of reducing Emissions Intensity of the GDP by 45% by 2030 against 2005 levels.

(Edited by : Pradeep John)