Where India Stands on Carbon Credits: The CCTS Explained

For years, India was one of the world's biggest *suppliers* of carbon credits — selling into international markets under the Clean Development Mechanism. Now it is building a market of its own. The Carbon Credit Trading Scheme (CCTS) is India's first domestic carbon market, and 2026 is the year it goes fully live. Here's where things stand.

What is the CCTS?

The CCTS was established under the Energy Conservation (Amendment) Act, 2022, with regulations adopted in July 2024. It is administered by the Bureau of Energy Efficiency (BEE) under the Ministry of Power. It has two arms:

• A compliance market — a cap-and-trade-style system based on GHG emission *intensity* (emissions per unit of output). Companies that produce more efficiently than their sector target earn tradable Carbon Credit Certificates (CCCs); those that fall short must buy them.
• A voluntary Offset Mechanism — for projects (including waste, renewables, and afforestation) to generate credits outside the capped sectors.

The current status (2026)

The rollout is well underway:

• Compliance obligations came into force with FY 2025–26.
• GHG Emission Intensity (GEI) targets have now been notified for nine energy-intensive sectors: Aluminium, Chlor-Alkali, Cement, Fertiliser, Iron & Steel, Pulp & Paper, Petrochemicals, Petroleum Refinery, and Textile — four in October 2025, three more in January 2026.
• The first official compliance-market trades of CCCs are expected around mid-2026, when the Indian Carbon Market is set to formally launch.

In short: the framework is no longer theoretical. Targets are notified, obligations are live, and trading is imminent.

Why it matters for business

The CCTS turns carbon from a reputational talking point into a financial line item:

• Efficient producers earn. Beat your sector's intensity target and you hold sellable certificates.
• Laggards pay. Miss it, and you buy credits to comply.
• Everyone must measure. You cannot manage — or trade — what you do not accurately track.

And it sits alongside global mechanisms. Under Article 6 of the Paris Agreement, India can also engage in international credit transfers, linking domestic effort to global finance.

Where waste and circularity fit

The capped sectors are heavy industry — but the voluntary Offset Mechanism is where waste, biogas, recycling, and afforestation projects come in. Municipal and business waste operators that divert organics, capture methane, and recover materials can generate offsets — *if* they can prove it. That proof requirement is the same everywhere: rigorous, verifiable MRV.

What to do now

1. Measure your baseline. Know your emissions or your diverted-waste tonnage precisely.
2. Identify your lever. Efficiency (compliance) or project offsets (voluntary).
3. Instrument for MRV. Credit-grade data is the entry ticket to any market.
4. Watch the sector notifications. If you are in a covered sector, your target is either set or coming.

Frequently asked questions

Is India's carbon market live yet?

Compliance obligations began in FY 2025–26, targets are notified for nine sectors, and the first official CCC trades are expected around mid-2026.

Who administers the CCTS?

The Bureau of Energy Efficiency (BEE), under the Ministry of Power.

Can waste projects participate?

Yes — primarily through the voluntary Offset Mechanism, provided they meet the methodology and verification requirements.

---

India's carbon market is arriving fast, and it rewards those who can prove their impact. For the mechanics behind credits, read our guide to carbon credits in the waste value chain, or see how Reclevo makes waste traceable with RwAM and the Reclevo platform.