Carbon Credit Trading Scheme – An Overview
On June 26, 2023, the Ministry of Environment, Forests, and Climate Change introduced the draft Green Credit Programme Implementation Rules. Just two days later, on June 28, the Ministry of Power launched the Carbon Credit Trading Scheme (CCTS) 2023. Both programs reflect India’s strategic push toward climate responsibility through market-based mechanisms.
The Bureau of Energy Efficiency (BEE), under the Ministry of Power, is leading this effort. Under the CCTS, each ton of CO₂ reduced or avoided earns a carbon credit, which can be bought, sold, or traded. This incentivizes sustainability while enabling businesses to generate measurable financial returns.
Unsure how to report carbon credits or unlock their value? DoStartup’s environmental advisors can simplify compliance and maximize your gains.
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Emission Reduction Pooling
Enables pooling of emission reduction efforts across projects and entities.
Carbon Certificate Generation
Facilitates generation and trading of carbon credits with verified certification.
Financial Returns
Maximizes profitability by monetizing emissions savings.
Mandatory Compliance
Obligates high GHG-emitting industries to buy credits to meet reduction targets.
Promotes Renewable Energy
Drives shift toward clean energy adoption.
Who Needs to Register?
Improves ESG Scores
Aligns operations with environmental governance norms and boosts ESG ratings.
Incentivizes Sustainability
Encourages proactive climate action through tangible financial benefits.
Reduces Operational Costs
Emission-reduction efforts often lead to long-term cost savings.
Attracts Green Investors
Strengthens brand equity with CSR-driven investors and eco-conscious partners.
How To File It Online?
Follow this step-by-step guide to ensure your response is submitted correctly
Project Structuring
Identify eligible emission-reduction activities under CCTS.
Project Registration
Register the green project with the Bureau of Energy Efficiency (BEE).
Verification
Undergo validation from an accredited verification agency.
Credit Issuance
Upon successful verification, carbon credits are issued.
Trading
Sell or trade credits through approved power exchanges regulated by CERC.
1Ways to Generate Carbon Credits in India
- Renewable Energy Projects
- Energy Efficiency Measures
- Waste-to-Energy Projects
- Direct Seeded Rice and Mulching
- No-till or Conservation Tillage
- Crop Rotation and Cover Crops
2Top Industries That Benefit
- Energy & Utilities
- Cement, Steel & Chemical Manufacturing
- Transport and Fleet Operations
- Green Real Estate Projects
Key Benefits
- Access new revenue from green initiatives
- Gain early-mover advantage in Indian carbon markets
- Boost brand reputation with eco-compliance
- Lower indirect tax liabilities via exemptions
- Qualify for global carbon market partnerships
Pitfalls to Avoid During Filing
Common errors that can delay your submission
Taxation on Credits
Carbon credits are taxed at 18% GST in India.
However, exports of credits are exempt from GST, encouraging international sales.
Penalty for Non-compliance
Obligated entities must meet emission targets.
Failure attracts financial penalties and compliance actions.
Market Volatility
Prices are market-driven.
Credits trade on CERC-authorized exchanges; value fluctuates.
| Aspect | Compliance-Based | Voluntary |
|---|---|---|
| Regulation | Mandatory, government-led | Optional, industry-led |
| Emission Limits | Enforced by targets | No specific limits |
| Credit Purchase | Required for over-emitting | Optional participation |
| Credit Sales | Only eligible projects | Any verified reduction project |
Streamlined Filing Process
- Project registration to credit issuance: 60–120 days1
- Verification agency fees apply2
- CERC exchange listing fees vary3
- 18% GST on carbon credit transactions4
- Exported credits exempt from GST5
Why Trust DoStartup?
Professional services with guaranteed satisfaction
Expert Consultation
Climate, ESG, and carbon trading specialists to guide project execution.
Carbon Project Structuring
Design and document green initiatives for credit eligibility.
End-to-End Compliance
Ensure seamless registration, verification, and reporting.
Marketplace Access
Get listed on power exchanges approved by CERC.
Frequently Asked Questions
Have a look at the answers to the most asked questions