Carbon Markets and Emissions — from PAT to CCTS.
India is building a national carbon market from the ground up. With 740 obligated entities across nine sectors and first compliance-based CCC trades underway on IEX and PXIL, the financial stakes of over- or under-performance against GEI targets are now material. CCC price: ₹1,740/tCO₂e. Non-compliance triggers Environmental Compensation at 2× the average CCC price.
India is building a national carbon market from the ground up. Understanding the regulations that underpin it — from the PAT Scheme’s energy saving certificates to the CCTS’s Carbon Credit Certificates — matters for any industrial operator in a covered sector. With 740 obligated entities across nine sectors and first compliance-based trades expected by October 2026, the financial stakes of over- or under-performance against GEI targets are now material.
India’s carbon market framework has been evolving for over a decade. The legal foundation is the Energy Conservation Act, substantially updated by the 2022 amendment. These regulations establish how emissions are measured, reported, and priced across energy-intensive industry. For the nine covered sectors — aluminium, cement, chlor-alkali, fertilisers, iron and steel, pulp and paper, petroleum refining, petrochemicals, and textiles — compliance is mandatory. The Carbon Credit Certificate price on IEX currently stands at Rs 1,740/tCO₂e. Non-compliance triggers Environmental Compensation at twice the average CCC price.
Energy Conservation Act, 2001
The Act that created the Bureau of Energy Efficiency and gave the central government authority to designate large energy consumers, set consumption standards, and mandate energy audits. It introduced tradeable energy saving certificates and laid the groundwork for everything that followed — including the PAT Scheme and the CCTS. Without this Act, neither mechanism would have a legal basis.
Read the official Act →Energy Conservation (Amendment) Act, 2022
The most significant update to India’s energy governance framework in two decades. It expanded the definition of energy to include non-fossil fuel sources, extended efficiency obligations to the transport sector, and — most importantly — created the legal basis for a domestic carbon credit trading system. It also introduced Renewable Consumption Obligations, requiring designated consumers to source a minimum share of energy from non-fossil sources. This amendment changed the compliance landscape fundamentally for every large industrial energy consumer in India.
Ministry of Power notification →Carbon Credit Trading Scheme, 2023
The CCTS is the institutional framework for India’s domestic carbon market. It defines how Carbon Credit Certificates are issued, verified, registered, and traded. The scheme operates in both compliance mode — mandatory for the nine covered sectors, with plant-level GEI targets notified by MoEFCC — and voluntary mode, open to offset project developers across the economy. The ICM Portal, launched 21 March 2026, is the single submission and registry platform. CCCs trade on IEX, PXIL, and HPX under CERC oversight at T+1 settlement. Over-the-counter trading is barred. The BEE maintains the national registry through the Grid Controller of India.
Read the official scheme →Greenhouse Gas Emission Intensity Target Rules, 2025
MoEFCC notified GEI targets in two phases. The first notification (April 2025, finalised October 2025) covered aluminium, cement, chlor-alkali, and pulp and paper across 282 entities. The second notification (June 2025, finalised January 2026) covered iron and steel, fertilisers, petroleum refining, petrochemicals, and textiles — expanding total obligated entities to 490. Targets are expressed as tCO₂e per tonne of equivalent product, using FY2023-24 as the baseline year, with compliance obligations for FY2025-26 and FY2026-27. Non-compliance attracts Environmental Compensation equal to twice the average CCC trading price per tCO₂e of shortfall.
MoEFCC official website →Perform Achieve and Trade (PAT) Scheme
The PAT Scheme is India’s flagship industrial energy efficiency programme and the predecessor to the CCTS. It assigns three-year Specific Energy Consumption targets to Designated Consumers across eleven sectors. Facilities beating their target earn Energy Saving Certificates tradeable on IEX and PXIL. Six cycles have been completed since 2012. The scheme has delivered cumulative CO₂e reductions running into hundreds of millions of tonnes. Sectors currently transitioning to CCTS have moved from PAT-based ESCert compliance to CCTS-based CCC compliance starting FY2025-26.
BEE official PAT programme page →