India Approves Ten Sectors for Carbon Offset Market Rollout in Phases
India’s government has approved a list of ten sectors to participate in its voluntary carbon market under the Carbon Credit Trading Scheme (CCTS), including energy, agriculture and forestry, according to a notice from the Bureau of Energy Efficiency (BEE) dated Sept. 20 and published on Oct. 15.
Six sectors have been approved for the first phase, namely energy, industry, waste, agriculture, forestry, and transport, in line with recommendations from the market’s steering committee. Examples of technologies covered in each sector include:
– Energy: Green hydrogen production via electrolysis or biomass, energy efficiency in lime production, compressed biogas, renewable energy with storage and offshore wind.
– Industry: Green ammonia usage and feedstock switches in ammonia-urea manufacturing.
– Waste: Biochar production and landfill gas capture.
– Agriculture: Systematic rice intensification, biochar, and agroforestry.
– Forestry: Afforestation and institutional forestry.
– Transport: Modal shift and electric vehicles.
A second phase will include construction, fugitive emissions from fuels and industrial gases, solvent use, and carbon capture and storage (CCUS).
The BEE, which oversees offset methodology development under the CCTS, said in its notice that it would publish sectoral scope and methodologies from “time to time” after approval from the central government.
In response, the Carbon Removal India Alliance (CRIA) on Oct. 19 welcomed the inclusion of carbon dioxide removal (CDR) technologies such as biochar and agroforestry, describing it as India’s “first acknowledgment and inclusion of any CDR methods under the ICM regime.”
The Carbon Markets Association of India (CMAI) also cited the BEE notice as a milestone in operationalizing the country’s offset market by defining sector scopes.
The CCTS, first announced in 2023, is expected to launch carbon credit trading in 2026. The market will involve both compliance and voluntary mechanisms. Non-obligated entities can register projects that reduce or avoid emissions and earn Carbon Credit Certificates (CCCs) to trade on power exchanges, as OPIS earlier reported.
Under the compliance mechanism, nine energy-intensive sectors, including aluminum, cement, and steel, are being considered for mandatory greenhouse gas emission intensity targets. Entities exceeding greenhouse gas emissions intensity targets will earn credits, while those failing must purchase certificates to cover the shortfall.
Reporting by Melissa Goh, mgoh@opisnet.com
Editing by Lujia Wang, lwang@opisnet.com
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