India's Carbon Market Portal officially goes live : An advisory perspective from Verdantika
- Mar 26
- 8 min read
Updated: Mar 27
India Climate Week 2026 recently organized from Mar 12th-17th in New Delhi brought together policymakers, regulators, industry leaders, advisors like us working in the energy transition and sustainability space and market participants at a time when India’s decarbonization efforts are shifting from intent to implementation (I understand that many of you might be questioning this, as it isn't yet evident on the ground for people and industry to fully and sincerely appreciate it.). Verdantika, participated as a keynote speaker at the National Certification Workshop on Carbon Markets & Net Zero Readiness, organized by the Carbon Markets Association of India (CMAI) from 13th -14th March.
Carbon Markets Association of India - CMAI India Climate Week 2026: 2nd edition, titled "प्रकृतिरेव शरणम्" Gateway to Net Zero + Climate Policy Conclave + SAF Conclave.
Original Pic Courtesy : Verdantika (Madhvi Agarwal, Dakshdeep Singh)
Our knowledge delivery session focused on critical gaps we continue to see across industrial sectors from on paper strategies to real disconnect between net-zero ambitions and on-ground execution challenges.
Original Pic Courtesy : Verdantika (Madhvi Agarwal, Dakshdeep Singh)
This engagement was followed by our participation at the Bharat Electricity Summit (BES) 2026 and Prakriti 2026, creating a continuous view across policy, power systems and broader sustainability ecosystems.
Original Pic Courtesy : Verdantika (Madhvi Agarwal)
Original Pic Courtesy : Verdantika (Madhvi Agarwal)
A key development during this period was the operationalization of India’s carbon market architecture to roll ahead with India's Carbon Credit Trading Scheme (CCTS);
Indian Carbon Market (ICM) Portal officially launched at an inaugural ceremony during #Prakriti2026 held from Mar 21st -22nd, 2026, organized by Ministry of Power (Govt of India) in collaboration with Bureau of Energy Efficiency (BEE). This marks a structural step towards a compliance-led approach.
Link to access the ICM Portal : www.indiancarbonmarket.gov.in
As of Jan 2026, 9 major energy-intensive sectors have been identified and covered under the compliance mechanism of India's Carbon Credit Trading Scheme (CCTS) to promote and facilitate the process of industrial decarbonization. These sectors play a crucial role in the overall emissions profile of the country and their inclusion in the CCTS reflects a strategic approach to mitigating greenhouse gas emissions at a national level. (PS : Power sector has been kept out of the purview for the time being while Chinese domestic Emissions Trading Scheme (ETS) includes power sector within its larger ambit). The government has notified specific Greenhouse Gas Emission Intensity (GEI) targets for heavy emitters, with the latest notification on Jan 13, 2026, bringing additional industries into the fold of CCTS scheme.
The CCTS operates through two mechanisms: the Compliance Mechanism and the Offset Mechanism. Under the Compliance Mechanism, emissions-intensive industries designated as Obligated Entities are required to meet assigned Greenhouse Gas Emission Intensity (GEI) targets. Obligated Entities that outperform their targets are eligible to receive Carbon Credit Certificates which they can trade with obligated entities which are unable to meet their targets.
It is important to note that India's CCTS in its current form is NOT a voluntary carbon credit offset-first market, which is characterized by a lack of stringent regulatory oversight and varying levels of commitment from participants. Instead, the CCTS is fundamentally a compliance-led mechanism, designed to enforce adherence to the established GEI targets through regulatory measures. This compliance-driven approach ensures that industries are not only encouraged but also mandated to reduce their carbon footprints in alignment with national climate goals. While voluntary participation in carbon credits may still be in the process of evolving, the core structure of the CCTS emphasizes accountability and measurable outcomes, positioning it as a critical tool in India's broader strategy for achieving sustainability and meeting international climate commitments. Link to read more.
Original Pic Courtesy : Verdantika (Madhvi Agarwal)
Original Pic Courtesy : Verdantika (Madhvi Agarwal)
Key Details:
A) Entities : Phase 1 (from FY2026): Initially, the compliance mechanism under the CCTS will cover entities from 9 industrial sectors that were previously regulated under the PAT scheme: aluminium, chlor-alkali processes, cement, fertilizer, iron and steel, pulp and paper, petrochemicals, petroleum refining, and textiles. These 9 notified sectors represent approximately 15–20% of India's total greenhouse gas emissions.
First tranche of notifications DTD. Oct 8, 2025 included ~282 entities.
Second tranche of notifications on 13th Jan 2026 added more, bringing the total to ~ 490 obligated entities.
Inclusion thresholds : Entities currently covered under the PAT scheme will be transitioned to the CCTS, using the same inclusion thresholds (varying by sector).
GHGs covered : CO2, Perfluorocarbons (PFCs). Follows a 'gate-to-gate' approach to cover both direct emissions from fuel combustion and industrial processes, and indirect emissions from electricity and heat consumption (Scope 1 and 2). In addition, some Scope 3 emissions will also be considered (import and export of intermediary products).
Types of entities: Installations/ facilities
Years of operations : The initial targets are set for two fiscal years: 2025-2026 (FY 2025-26) & 2026-2027 (FY 2026-27)
9 industrial sectors formally notified under Indian CCTS | Tranche 1 entities | Tranche 2 entities | |
Iron and Steel | NA | 0 | 0 |
Cement | Tranche 1 DTD. Oct 8, 2025 | 186 | 0 |
Fertilizers | NA | 0 | 0 |
Pulp and Paper | Tranche 1 DTD. Oct 8, 2025 | 53 | 0 |
Chlor-Alkali | Tranche 1 DTD. Oct 8, 2025 | 30 | 0 |
Aluminium (including secondary) | Tranche 1 DTD. Oct 8, 2025 + Tranche 2 DTD. Jan 13, 2026 | 8 | 3 |
Petrochemicals | Tranche 2 DTD. Jan 13, 2026 | 0 | 11 |
Textiles | Tranche 2 DTD. Jan 13, 2026 | 0 | 173 |
Petroleum Refineries | Tranche 1 DTD. Oct 8, 2025 + Tranche 2 DTD. Jan 13, 2026 | 4 | 21 |
TOTAL | 281 | 208 | |
c) Mechanism: The scheme uses an intensity-based, baseline-and-credit system where companies earn credits (CCCs) for exceeding targets. Entities that over-achieve their notified Greenhouse Gas Emissions Intensity (GEI) targets are eligible for issuance of CCC, which are tradable through power exchanges. Non-obligated entities, including renewable energy producers, may voluntarily register approved mitigation activities for the purpose of seeking issuance of CCC. But the mechanism for inclusion of offset credits is yet to be fully build in place alongside compliance market.
d) Scheme Architecture :
The financial support for implementation of the CCTS is to be met by the Bureau of Energy Efficiency (ऊर्जा दक्षता ब्यूरो) from the fees and charges collected from entities under the scheme and its own resources.
Regulatory support for trading activities under the Indian Carbon Market, including matters relating to trading of carbon credit certificates, is provided by the Central Electricity Regulatory Commission (CERC).
The institutional arrangements for implementation of the scheme comprise a National Steering Committee co-chaired by the Secretaries of the Ministry of Power and the Ministry of Environment, Forest and Climate Change, with Grid Controller of India Limited functioning as the Registry and the Bureau of Energy Efficiency serving as the Administrator.
e) Banking and borrowing : Unlimited banking of CCCs is allowed. Banked CCCs can be either sold within the ICM or used to meet future compliance obligations. Borrowing is not allowed.
f) Compliance period : 1 Year. The covered entity must submit a verified GHG emissions report and proforma to the BEE and State Designated Agency (SDA) within four months after the compliance year ends.
g) Links with other systems : Currently Indian CCTS is not linked with any other system. However, it is designed to eventually align with Article 6.4 of the Paris Agreement, allowing for participation in international carbon trading in the future.
h) ICM Portal registration fees : ICM account registration fees is INR 5000/-.
h) Penalties and enforcement : Applicable if covered entities fail to meet their compliance obligations. Central Pollution Control Board (CPCB) is the designated authority for enforcing penalties.
i) Enforcement : Refer detailed guidelines provided under CERC notification DTD. Feb 27, 2026 where CERC published terms and conditions for sale and purchase of carbon credit regulation.
j) List of Accredited Carbon Verification Agency empaneled under CCTS : Currently, Bureau Veritas India (Pvt.) Ltd is the only company empaneled as ACVA for the compliance mechanism for notified entities in the following sectors: 1. Iron and steel, 2. Petrochemical and 3. Petroleum Refinery. Here is the link from BEE website to check regular updates on ACVA list.
The real gap we foresee is execution, not intent
Across our conversations with various industry veterans at CMAI’s certification workshop as well, one issue stood out consistently—the gap between net-zero commitments and execution capability.
In industrial systems, decarbonization is not an engineering capability / grit problem. It is an operational and financial one. Key friction points that keep popping out:
Translating emission targets into procurement and capex decisions
Integrating carbon pricing signals into industrial planning and contracts
Building credible MRV (Monitoring, Reporting, Verification) systems
Structuring projects to attract bankable capital, not just policy support. A good to read article published by Project Finance International (February’26 edition), Mr. Narayan Subramaniam, Senior Vice President at SBICAPS, where he breaks down how to rewire Sustainability-Linked Loans (SLLs) for the CCTS era.
Without these, carbon markets risk becoming compliance exercises rather than drivers of efficiency and competitiveness.
Beyond renewables, there is a need for system re-balancing
A recurring theme across all three high agenda platforms was the dominant focus on renewable energy deployment. While renewables remain important, they represent only one part of the decarbonization equation. For industrial economies like India, a narrow renewables-led narrative is INSUFFICIENT.
A balanced decarbonization pathway must include:
Industrial process efficiency improvements (often the lowest-cost abatement levers)
Fuel switching strategies (including Bio-CNG / CBG, Bio-LNG / LBG, bio-based fuels and sustainable aviation fuel transitional pathways)
Carbon capture, utilization, and storage (CCUS) for hard-to-abate sectors (steel, cement, chemicals)
Grid stability and dispatchable power considerations, especially as renewable penetration increases
Material efficiency and circularity, including integration of biomaterials in design choices for particularly in steel, cement, and chemicals sectors.
Emphasis on battery energy storage systems (BESS) whether Short duration (2-4 hrs) or Long duration (6-8 hours, 8-12 hours)
Carbon markets : How big it is as an opportunity?
With mechanisms such as the EU’s Carbon Border Adjustment Mechanism (CBAM) influencing trade, India’s carbon market is also emerging as a tool for industrial competitiveness, not just environmental compliance. However, this linkage will depend on:
Alignment of domestic carbon pricing signals with global benchmarks like EU ETS.
Credibility of MRV frameworks
Ability of industries to reduce emissions without eroding cost competitiveness
This is where ICM, if designed and implemented effectively in next 4 months, can act as a bridge between policy and industry especially for MSMEs (the most vulnerable to these shocks).
Our perspective
Verdantika’s engagement across these platforms reinforces a consistent view:
Decarbonization in India will be shaped less by announcements and inaugurations. This requires working at the intersection of global and domestic supply chain strengthening, raw material security, financial structuring and risk allocation and most importantly : a trained and quick to adapt workforce (not AI of-course). For them, the opportunity is not merely in participating in carbon markets but to build the institutional, technical, and financial depth required to make them function effectively.
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