India Set to Launch First Comprehensive Carbon Trading Programme

India is in the final stage of launching its first comprehensive carbon-trading programme aimed at regulating and reporting industrial emissions. The scheme will mark a major step in the country’s climate action framework.

According to officials from the Bureau of Energy Efficiency (BEE), the programme will cover the period from April 2025 to March 2026. Interviews for verifiers are currently underway to ensure compliance and transparency.

What is the Carbon Credit Trading Scheme?

The Carbon Credit Trading Scheme (CCTS) is India’s first compliance-based carbon market. Under this system:

• Industries will be assigned emission targets.
• Units emitting less than their limit can earn carbon credits.
• Units exceeding limits must purchase credits or face penalties.

The BEE has already issued emission targets to around 490 industrial units across seven sectors through notifications released in October 2025 and January 2026.

Steel and Fertiliser Yet to Be Included

Although the scheme aims to eventually cover around 800 units responsible for most of India’s industrial emissions, the steel and fertiliser sectors are not included in the first phase.

This is significant because steel, along with fertiliser, falls under the European Union’s Carbon Border Adjustment Mechanism (CBAM), which came into force in January and imposes a carbon tax on exporters of high-emission goods.

Experts say the inclusion of these sectors in later phases will be crucial to address international trade pressures and climate commitments.

Not a Delay, Says BEE

Saurabh Diddi, Director at the Bureau of Energy Efficiency, clarified that the scheme is not delayed. He stated that emission targets have already been notified for 490 units, and implementation is progressing as planned.

The carbon market will help industries monitor emissions more efficiently and encourage cleaner production methods.

Why This Matters

India’s move comes at a time when global climate regulations are tightening. A domestic carbon market will:

• Promote energy efficiency
• Encourage green technology adoption
• Improve global competitiveness of Indian exporters
• Align India with global climate commitments

If successfully implemented, the scheme could become a cornerstone of India’s low-carbon growth strategy.

MCQs: India’s Carbon Credit Trading Scheme (CCTS)

Q1. India’s first comprehensive carbon-trading programme is being implemented by which organisation?
(a) SEBI
(b) NITI Aayog
(c) Bureau of Energy Efficiency (BEE)
(d) Ministry of Environment
(e) NABARD

Ans: (c)
Sol: The Bureau of Energy Efficiency (BEE) is implementing the Carbon Credit Trading Scheme.

Q2. The first phase of India’s carbon credit trading scheme covers approximately how many industrial units?
(a) 300
(b) 400
(c) 490
(d) 650
(e) 800

Ans: (c)
Sol: Emission targets have been issued to around 490 units across seven sectors.

Q3. The compliance period for the first phase of India’s carbon trading programme is:
(a) April 2024 – March 2025
(b) January 2025 – December 2025
(c) April 2025 – March 2026
(d) January 2026 – December 2026
(e) April 2026 – March 2027

Ans: (c)
Sol: The programme covers April 2025 to March 2026.

Q4. Which two major sectors are not included in the first phase of the carbon market?
(a) Power and Cement
(b) Steel and Fertiliser
(c) Textiles and Chemicals
(d) Oil and Gas
(e) Automobile and Aviation

Ans: (b)
Sol: Steel and fertiliser sectors are yet to be included in the first phase.

Q5. The European Union’s Carbon Border Adjustment Mechanism (CBAM) primarily aims to:
(a) Promote digital trade
(b) Provide export subsidies
(c) Impose a carbon tax on high-emission imports
(d) Increase foreign investment
(e) Regulate agricultural exports

Ans: (c)
Sol: CBAM imposes a carbon tax on imports of high-emission goods into the EU.

Q6. Under a carbon credit trading scheme, industries that emit less than their assigned limit can:
(a) Pay additional tax
(b) Shut operations
(c) Earn and sell carbon credits
(d) Import coal freely
(e) Avoid reporting emissions

Ans: (c)
Sol: Units emitting below limits can earn carbon credits and trade them.

Q7. The inclusion of around 800 units in later phases would cover nearly what share of India’s industrial emissions?
(a) Minor share
(b) Half
(c) Nearly all
(d) One-fourth
(e) One-third

Ans: (c)
Sol: The proposed expansion to 800 units aims to cover nearly all industrial emissions.