A national compliance-based Carbon Credit Trading Scheme (CCTS), under which the Government will assign greenhouse-gas emission intensity targets to obligated entities, is expected to launch by October 2026. The scheme has been years in the making—first formally notified in June 2023 after amendments to the Energy Conservation Act, 2001.
The CCTS establishes a regulated Indian Carbon Market (ICM), enabling companies to use a market-driven mechanism to reduce emissions instead of paying penalties for excessive pollution. Each carbon credit issued under the scheme represents the reduction or removal of one tonne of CO₂-equivalent.
For renewable-energy producers like Oribi, the framework opens new income streams by enabling collaboration with larger industries, including those operating in Tier-2 and Tier-3 cities. It also marks a significant step toward India’s commitments under the Paris Agreement and the Sustainable Development Goals.
Despite its potential, the scheme has drawn some criticism. Unlike a traditional cap-and-trade system, the CCTS is intensity-based. This means that if a company increases production, its total emissions may still rise, yet it could remain within its intensity targets and even earn credits. Ensuring accurate measurement, reporting, and verification also remains a challenge.
Nevertheless, the scheme represents meaningful progress and signals India’s intent to align with its medium- and long-term greenhouse-gas reduction and net-zero goals.
