In Short : India’s carbon credit prices are set to rise with the rollout of the Carbon Credit Trading Scheme (CCTS), expected by 2026. Covering key industrial sectors, the scheme will issue carbon credit certificates to encourage emissions reduction. Initial prices may start at $10 per ton, with further growth likely as demand increases, supporting India’s 2030 climate goals.
In Detail : India is preparing to launch its Carbon Credit Trading Scheme (CCTS), a move expected to raise domestic carbon credit prices. The scheme, introduced through amendments to the Energy Conservation Act, 2001, sets a legal framework for a carbon market aimed at incentivizing emission reductions across various industrial sectors.
The Bureau of Energy Efficiency (BEE), under the Ministry of Power, will oversee the administration of the scheme. Initially, CCTS will cover high-emission industries such as petroleum refineries, cement, steel, aluminum, thermal power plants, and fertilizers. Over time, more sectors will be brought under the program to broaden its impact.
The carbon credit market will involve the issuance of carbon credit certificates (CCCs) to entities achieving emission reductions. A compliance market is expected to become operational by 2026, while a voluntary market may run alongside or follow soon after. These certificates will serve as tradeable assets, encouraging investment in low-carbon technologies.
Experts predict the starting price for carbon credits in India could be around $10 per metric ton of CO₂ equivalent. As the market matures and demand for credits grows, prices are expected to increase. To manage volatility, the government plans to maintain a reserve fund to stabilize the market during demand fluctuations.
The CCTS aligns with India’s broader climate commitment to reduce the emission intensity of its GDP by 45% by 2030 from 2005 levels. By creating a structured and incentivized system, the scheme encourages companies to adopt cleaner technologies and supports the country’s transition to a low-carbon economy.
While the scheme presents opportunities, it also introduces challenges, especially for businesses operating in the voluntary carbon market. These include adapting to new compliance, monitoring, and reporting standards. However, the evolving carbon market is set to play a pivotal role in India’s net-zero journey and create financial incentives for sustainable development.
