India has recently created trading guidelines for carbon credits. These guidelines include 13 activities that fall under three categories, allowing their emission of carbon to be monitored and traded on the global market.
Carbon credits are a major tool in the fight against climate change, as they allow countries to adhere to their commitments made under international agreements like the Paris Agreement.
Carbon credits, a key component of Article 6.2 of the Paris Agreement, are units of pollution-reduction efforts that one entity can use to offset its own emissions. Trading of carbon credits incentivizes entities to reduce their own emissions, by allowing them to purchase emission reductions from other sources and use those to reach their own targets for reducing greenhouse gas emissions. In India, the government has now finalized a list of activities that will be eligible for trading in carbon credits.
In India, the National Designated Authority for the Implementation of the Paris Agreement (NDAIAPA) has finalized 13 activities related to GHG mitigation which can generate carbon credits – renewable energy with storage, solar thermal power, off-shore wind, green hydrogen, compressed biogas, emerging mobility solutions, high-end technology for energy efficiency and sustainable aviation fuel among others. Carbon credits also include alternate materials and removal activities that would help reduce emissions.
Carbon credits are created for activities that reduce or avoid emissions, such as energy efficiency projects and renewable energy projects. National programs allow companies to purchase these credits in order to offset their own climate pollution. This helps them meet reduction targets set by the government while also providing incentives and funding for clean technologies that may otherwise be overlooked.