Compliance obligations under India's Carbon Credit Trading Scheme enter into force for seven sectors
As of fiscal year 2025–26 (starting 1 April 2025), compliance obligations under India's Carbon Credit Trading Scheme (CCTS) are in force for approximately 490 entities across seven energy-intensive sectors, following the notification of greenhouse gas (GHG) emission intensity targets by the Ministry of Environment, Forest and Climate Change (MoEFCC). The targets were notified in two phases: the first four sectors — aluminum, cement, chlor-alkali, and pulp and paper — were notified in October 2025, followed by petroleum refining, petrochemicals, and textiles in January 2026. All targets are notified at the sub-sector level.
This marks the start of a gradual transition from India's existing Perform, Achieve and Trade (PAT) energy efficiency program, which previously governed these sectors, to the CCTS compliance mechanism. Compliance obligations are now in force for seven of the nine sectors to be initially covered by the CCTS. Covered entities now have legally binding GHG emission intensity targets for the compliance years 2025–26 and 2026–27, using fiscal year 2023–24 as the baseline. Compliance obligations apply retroactively, with the first compliance date on July 31 for the 2025-26 compliance year. Entities that outperform their targets will be eligible to receive Carbon Credit Certificates (CCCs), tradeable on India's power exchanges; those that fall short must purchase and surrender an equivalent number. Final targets for the remaining two covered sectors — iron and steel and fertilizer — are still pending.
On 21 March 2026, Power Minister Manohar Lal Khattar launched the Indian Carbon Market Portal at the Prakriti 2026 International Conference on Carbon Markets in New Delhi. The portal serves as the central digital backbone of the Indian Carbon Market, enabling end-to-end processes from entity registration to the issuance of CCCs, including validation, verification, and accreditation of third-party monitoring, reporting, and verification (MRV) bodies. The platform is designed to serve both obligated and non-obligated entities and includes provisions for interacting with international carbon markets under Article 6 of the Paris Agreement, allowing project developers to register activities intended for cross-border crediting.
The first CCC trading is expected to launch by mid-2026. For further details on the CCTS compliance mechanism, target-setting process, and voluntary offset framework, see our November 2025 news update.
