What Is India's Carbon Credit Trading Scheme (CCTS)? A Simple Guide
India has got its own carbon market scheme now. This section tells you about the Carbon Credit Trading Scheme, how it works, whom it applies to, and why it is important for businesses and careers.
CCTS is India's carbon market for compliance.
The targets are emission intensity-based.
490 organizations were covered as of January 2026.
1 certificate = 1 tCO₂e.
The Carbon Credit Trading Scheme (CCTS) is India's official carbon market, notified in June 2023. The government sets emission-intensity targets for energy-intensive industries. Companies that beat their targets earn Carbon Credit Certificates (1 certificate = 1 tonne of CO₂e), and companies that miss them buy certificates to cover the gap.
This is precisely what the carbon credit idea is about. It takes a climate advantage and makes it quantitative, tradeable and accountable.
For many years in India, carbon credits were simply voluntary projects like a wind farm or a cookstove initiative that sold credits to buyers in other countries. All this has changed. India has created its own official carbon market and is putting hundreds of major industrial facilities into it.
This guide will cover the concept of CCTS, including how it works, whom it affects, and why it’s important in simple terms. If you are a beginner in this sphere, make sure to first read our guide on what carbon credits are.
CCTS at a Glance
| Full name | Carbon Credit Trading Scheme, 2023 |
|---|---|
| Legal basis | Energy Conservation Act, 2001 (amended 2022) |
| Notified | June 2023 |
| Market type | Compliance market, intensity-based baseline-and-credit |
| Unit traded | Carbon Credit Certificate (1 CCC = 1 tCO₂e) |
| Coverage | 490 obligated entities in energy-intensive sectors (as of January 2026) |
| Administrator | Bureau of Energy Efficiency (BEE) |
| Trading | On power exchanges, regulated by CERC |
01What Is the Carbon Credit Trading Scheme?
Short Answer: CCTS is the official carbon trading scheme of India. It was launched in June 2023 via the Energy Conservation Act and is responsible for creating the Indian Carbon Market, where emission reduction certificates can be traded.
The principle is straightforward – price emission reduction. When a cement factory outperforms its expectations, it gets something that it can trade. Otherwise, if the factory performs poorly, it pays. In essence, clean production becomes cheaper.
CCTS also supports India's climate commitments, including its goal of net-zero emissions by 2070.
02How Does CCTS Work?
Short answer: An emission intensity goal is set for every obligated company. At the end of the compliance period, those who outperform their target will get the Carbon Credit Certificate, and those who fail to meet their target need to purchase certificates.
Why Is It "Intensity" and Not the Total Amount of Emissions?
Since the emission goals of CCTS are set in terms of emissions per unit of production, e.g., tCO₂e per tonne of cement, it enables industries to grow and become less polluting at the same time, which is quite appropriate for the dynamic Indian economy.
A Simple Illustration
Imagine Plant A's target is 0.80 tCO₂e per tonne of product and it achieves 0.75. On 1 million tonnes of output, it has cut 50,000 tonnes more than required, so it can earn 50,000 certificates. Plant B misses its target by 20,000 tonnes and must buy 20,000 certificates. Both outcomes rest on accurate emissions data, which is why measuring Scope 1, 2 and 3 emissions properly matters so much.
03Who Has to Follow CCTS?
Short Answer: “Obligated Entities” in notified energy-intensive industries. By January 2026, the Government has notified targets for 490 entities in industries such as aluminium, cement, chlor-alkali, pulp and paper, petroleum refineries, petrochemicals and textiles.
Cement
Highly emitting industry due to its processes and fuels for clinker manufacturing.
Aluminium
Electricity-intensive smelting of metal.
Refining & Petrochemicals
Significant emissions from fuels and processes.
Textiles, Paper, Chlor-Alkali
High usage of heating and power consumption.
Additional industries are expected to come into the scope of this mechanism, including iron and steel. Non-compliant entities can also participate in the scheme through a distinct voluntary offset mechanism being developed for non-obligated entities.
04Who Runs India's Carbon Market?
Short answer: The Bureau of Energy Efficiency (BEE) administers CCTS, Grid Controller of India runs the registry, CERC regulates trading, and certificates are traded on power exchanges. A National Steering Committee guides the overall market.
- National Steering Committee for the Indian Carbon Market: Sets direction, co-chaired by the Ministry of Power and the Ministry of Environment, Forest and Climate Change.
- Bureau of Energy Efficiency: Proposes targets, accredits verifiers and recommends certificate issuance.
- Grid Controller of India: Keeps the registry of who holds which certificates.
- CERC and power exchanges: Regulate and host the actual trading.
Understand India's Carbon Market Inside Out
The Advanced Certificate Program in Carbon Credits, Carbon Markets & Net-Zero Pathways, delivered with IIT Roorkee's Continuing Education Centre, covers CCTS, carbon accounting, MRV and global carbon markets, with live weekend classes and a capstone project. Batch 3 starts November 2026. eAsia is committed to a green future.
05How Is CCTS Different from the Voluntary Carbon Market?
Short answer: CCTS is compulsory for covered sectors and is regulated by law. The voluntary carbon market is optional because companies purchase credits to fulfil their voluntary climate commitments.
| Aspect | CCTS (Compliance) | Voluntary Carbon Market |
|---|---|---|
| Participation | Mandatory for obligated entities | Optional |
| Rule Setting | Government of India | Independent standards like Verra and Gold Standard |
| Unit | Carbon Credit Certificate | Verified carbon credits or offsets |
| Major Buyers | Industries that did not meet their targets | Businesses with net-zero or climate-related targets |
| Place of Trade | Indian power exchanges | Registries, brokers and international platforms |
06Why Is CCTS Important for Businesses and Careers?
Short Answer: Through CCTS, emissions either become a liability or a financial asset. With covered companies having to monitor, reduce and trade carbon, CCTS is already creating career opportunities in Indian industries.
For businesses, this entails spending on improved energy efficiency and cleaner fuels while collecting the necessary information. For employees, CCTS creates demand for new types of positions, such as carbon analysts, greenhouse gas accountants, carbon management professionals, MRV and verification specialists, energy managers and carbon credits consultants. As emissions data becomes a core component of ESG reporting, these skill sets overlap, as we explain in what is ESG and our GRI Standards guide.
"Once a tonne of carbon has its price, every factory needs somebody to calculate it."
07Where Can You Learn More?
- Carbon Credits: What They Are and How They Work: the basics.
- Scope 1, 2 and 3 Emissions Explained: how emissions are measured.
- IIT Roorkee Certification in Carbon Credits: Is It Worth It?: an honest program review.
- Best Carbon Credit Course in India: your training options.
For structured learning, explore the Carbon Credits, Carbon Markets & Net-Zero Pathways program, the ESG & Sustainability Reporting program, or browse all eAsia Academy courses.
08Sources
- Press Information Bureau: GHG Emission Intensity Targets Notified for 208 More Industries (January 2026)
- International Carbon Action Partnership (ICAP): Indian Carbon Credit Trading Scheme
- Carbon Credit Trading Scheme, 2023, Ministry of Power, Government of India
About the author: This guide was written by the eAsia Academy Team, which designs practice-based professional programs in Carbon Markets, ESG and HR Analytics in collaboration with IIT Roorkee's Continuing Education Centre. Last reviewed: October 2026. Carbon market rules change often, so check the latest notifications from BEE and the Ministry of Power before making business decisions.
FAQs
CCTS stands for Carbon Credit Trading Scheme. The government sets emission intensity targets for energy-intensive industries. Companies that outperform their targets receive Carbon Credit Certificates, while those that fail to meet their targets may need to purchase these certificates.
The Carbon Credit Trading Scheme was notified in June 2023 under the Energy Conservation Act, 2001, amended in 2022. Detailed compliance processes began in 2024, while emission intensity targets for industries were notified in October 2025 and January 2026.
Obligated entities in notified energy-intensive sectors must comply with CCTS. As of January 2026, 490 entities were covered across sectors such as aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles.
A Carbon Credit Certificate (CCC) is the tradable unit under India's CCTS. One CCC represents one tonne of carbon dioxide equivalent (CO₂e) in emission reductions beyond the applicable target.
The Bureau of Energy Efficiency (BEE) administers the market, Grid Controller of India operates the registry, and the Central Electricity Regulatory Commission (CERC) regulates trading. Certificates are traded on power exchanges, while the National Steering Committee provides overall direction.
India's Carbon Credit Trading Scheme (CCTS) is a compliance market for covered entities, whereas the voluntary carbon market is optional. Companies may purchase credits to support their climate commitments using voluntary carbon standards such as Verra and Gold Standard.
The Advanced Certificate Program in Carbon Credits, Carbon Markets & Net-Zero Pathways, offered by eAsia Academy in collaboration with IIT Roorkee's Continuing Education Centre, covers CCTS, carbon accounting, MRV and global carbon markets through weekend sessions and a capstone project. Visit https://easiaacademy.com/carbon/ for program details.