India is preparing a structured domestic carbon trading ecosystem to accelerate climate action and meet its net-zero by 2070 commitment. Policymakers have introduced the Carbon Credit Trading Scheme (CCTS) under the Energy Conservation (Amendment) Act, 2022, designed to launch trading by 2026 and gradually integrate existing Renewable Energy Certificates and Energy Savings Certificates into carbon credit certificates.
The Bureau of Energy Efficiency (BEE) will set sectoral emissions targets, initially in heavy industries, while regulators like CERC will oversee trading rules. India also hosted Prakriti 2025 to shape market frameworks and established a National Designated Authority under the Paris Agreement to facilitate market-based mechanisms. Additionally, the Green Credit Programme rewards voluntary environmental actions, widening market participation.
Evolution of Carbon Markets in India
Historically, Indian entities participated in international voluntary markets through renewable energy and afforestation projects. Today, the focus is moving toward a national Carbon Credit Trading Scheme (CCTS) that aims to introduce market-based compliance frameworks similar to international Emissions Trading Schemes (ETS).
Sectors like power, steel, cement, petrochemicals, and fertilizers are expected to play central roles due to their emission intensity and abatement potential.
Market Readiness and Growth Drivers
India is also witnessing strong momentum in renewable energy, electric mobility, hydrogen, and energy efficiency, strengthening the foundations of a credible carbon market.
As measurement, reporting, and verification (MRV) systems mature, India’s carbon market could unlock climate finance, accelerate industrial decarbonization, and support sustainable exports under mechanisms like carbon border adjustments.
Role of DRIIV in the Emerging Ecosystem
In this emerging ecosystem, DRIIV supports national sustainability efforts through executing mission-driven projects in clean energy transition, environmental monitoring, and water security — areas that align with India’s long-term climate and carbon market objectives.
FAQs
What is carbon trading in India?
A market mechanism to reduce emissions through buying and selling carbon credits.
Why is India developing carbon markets?
To support net-zero goals, industrial decarbonization, and climate finance.
Which sectors may be covered?
Power, steel, cement, chemicals, and other high-emission industries.
What benefits can carbon trading offer?
Lower emissions, technology adoption, and access to global climate capital.
What role does DRIIV play?
DRIIV facilitates clean energy and sustainability pilots aligned with climate pathways.
