Discover the transformative updates to India’s carbon credit trading scheme in 2023, executed under the purview of the Energy Conservation Act, 2001. In a groundbreaking move, the central government, in collaboration with the Bureau, has introduced substantial amendments, spotlighting an innovative “offset mechanism.”
This game-changing development empowers non-obligated entities to actively engage in the carbon credit ecosystem by registering projects. The offset mechanism, a key feature, facilitates the monitoring and certification of greenhouse gas emission reduction and avoidance. Obligated entities now receive specific emission reduction targets within the newly established compliance mechanism. At the same time, non-obligated counterparts can contribute through project registrations aligned with sectoral methodologies, paving the way for Carbon Credit Certificate issuance.
“The integrity of carbon credits has been a big problem for quite some time,” a researcher said.
Offset Mechanism and Amendments to Carbon Credit Certification Process in the Indian Carbon Market
Offset Mechanism for Carbon Credits:
- Non-obligated entities can now register projects for the issuance of Carbon Credit Certificates.
- The Bureau, with input from technical committees, will recommend sectors and methodologies for these entities to generate carbon credits.
Adjustments to the Principal Scheme:
- Non-obligated entities can either generate or validate projects under the amended Principal Scheme.
- The compliance mechanism now involves setting a target for emission reduction.
- The amendments include adjustments specifying the role of non-obligated entities in generating or validating projects.
- The compliance mechanism now includes giving a target for emission reduction.
Role of the Bureau and Technical Committees:
- The Bureau, with support from technical committees, will guide the offset mechanism.
- The Bureau and technical committees will identify sectoral scope and methodologies for the offset mechanism.
National Steering Committee and Approval Process:
- The National Steering Committee for the Indian carbon market, in consultation with the Central Government, will approve and periodically publish sectoral scope and methodologies.
Project Registration under Offset Mechanism:
- Non-obligated entities can register projects based on the published sectoral methodologies for greenhouse gas emission reduction, removal, or avoidance.
- Registration of projects under the offset mechanism.
Changes in Terminology:
- The adjustments in the Principal Scheme eliminate the words “under compliance mechanism”.
- The amendments were officially published in India’s Gazette on June 28, 2023.
“Carbon credit markets help companies meet their decarbonization goals.”
In conclusion, India’s bold strides in revamping its carbon credit trading scheme through the innovative offset mechanism mark a significant leap toward sustainability. The amended framework ensures a more inclusive and robust carbon credit ecosystem by empowering both obligated and non-obligated entities with clear guidelines, collaborative governance, and an emphasis on project registration; India paves the way for effective greenhouse gas reduction, embodying a commitment to global decarbonisation goals and fostering integrity in carbon credit markets.