India Introduces a Trading System for Carbon Credits
On 28 June 2023 the Indian Ministry of Power published a notice in the Gazette of India notifying the release of the Carbon Credit Trading Scheme, 2023. The Scheme came in to force on the day of publication in the Gazette.
The plan outlines each institution’s specific responsibilities for putting the Indian carbon credit trading plan into action. Carbon credits certificates (CCCs) will be awarded to required entities that achieve their greenhouse gas emission objectives. Those that cannot make up the difference by buying carbon credit certificates.
Below are the respective duties of each of the institutions.
Governance: National Steering Committee for Indian Carbon Market
The National Steering Committee for Indian Carbon Market was created when the Indian carbon market was formed. Representatives from the Ministry of Power, Ministry of Finance, Ministry of New and Renewable Energy, Bureau of Energy Efficiency, and several other ministries and organizations will sit on the committee. The Committee has the following functions:
- Observe how the Indian carbon market operates.
- Make recommendations to the Bureau of Energy Efficiency for the development of carbon market regulations and processes, greenhouse gas emission objectives, rules for selling carbon credit certificates outside of India, etc.
- Determine the requirements and format for submissions, the validity of the CCC, the floor price, the forbearance price, and other associated compliance measures.
Administrate: Bureau of Energy Efficiency
As the administrator the Bureau of Energy Efficiency (BEE) oversees the following functions:
- Determine which industries have the most potential to reduce greenhouse gas emissions.
- Create targets and a compliance trajectory for entities.
- Distribute CCCs
- Set CCC achieving criteria for each industry by conducting studies.
Registry: The Grid Controller of India
The Grid Controller of India Limited shall be the Registry for the Indian carbon market. The Registry shall oversee the following functions as determined by the Central Government from time to time:
- Keep a database of registration of CCC-related organizations
- Keep track of CCC transactions.
- Assist in the development of an information technology platform for maintaining a database of CCCs.
Regulator: Central Electricity Regulatory Commission
The Central Electricity Regulatory Commission shall be the regulator for the trading activities under the Indian carbon market. The regulator shall perform the following:
- Regulate CCC trading-related issues
- Regulate CCC trading frequency
- Provide market monitoring, and take the appropriate precautions to avoid fraud or distrust.
Furthermore, the Bureau of Energy Efficiency shall constitute one or more Technical Committees for different areas as required under compliance mechanisms for the purpose of the Scheme.
The full text of the Carbon Credit Trading Scheme 2023 can be found here.