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Cross-Cutting · CCTS · ComplianceIndia’s CCTS Compliance Cycle: What Obligated Entities Must Do Before June 2026 and Why the ACVA Shortage Is the Biggest Operational Risk
The Indian Carbon Market Portal launched on March 21, 2026, at the Prakriti 2026 International Conference on Carbon Markets in New Delhi. Approximately 490 entities across seven sectors — aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals, and textiles — now have legally binding GEI targets from FY2025-26. The first verified GHG report (Form A, verified by a BEE-Accredited Carbon Verification Agency) is due approximately four months after FY2025-26 closes — July 31, 2026 at the latest. Only 50 to 60 ACVAs are provisionally active against a compliance universe of nearly 500 entities. The April 2026 milestone — submission of a 5-year action plan and annual activity plan for FY26 — has arrived. The June 2026 Form A deadline is eleven weeks away. This article maps the complete CCTS compliance cycle, what each form requires, what the ACVA bottleneck means for scheduling, and what the ICM Portal launch changes about the practical compliance landscape for obligated entities across all seven currently notified sectors.
Seven of nine CCTS sectors are under legally binding compliance obligations from FY2025-26: aluminium, cement, chlor-alkali, and pulp and paper (gazette October 8, 2025); petroleum refining, petrochemicals, and textiles (gazette January 16, 2026). Iron and steel, and fertiliser remain pending final gazette notification. The ICM Portal launched March 21, 2026. The April 2026 milestone — 5-year action plan and FY26 annual activity plan submission — is now due. The June 2026 ACVA-verified Form A deadline (approximately July 31, 2026 for FY2025-26) is the next hard operational date for all notified entities. First CCC trading sessions on power exchanges are expected by mid-2026 to October 2026.
Approximately 490 entities across seven sectors have legally binding CCTS compliance obligations from FY2025-26. Iron and steel (253 entities, predominantly Chhattisgarh and Odisha) and fertiliser (~20 entities) remain pending final gazette notification but should treat the June 2025 draft as their working compliance reference — their compliance year has already started. The total universe once all nine sectors are notified will be approximately 740 entities covering over 700 Mt CO₂e, making the CCTS one of the world’s largest emissions trading systems by coverage volume.
The first compliance cycle involves two key output documents. Form A (Performance Assessment Document) must be submitted within four months of FY close — approximately July 31, 2026 for FY2025-26 — and must be verified by a BEE-accredited ACVA before submission. Form D (Compliance Assessment Document) is submitted within two weeks of the last trading session and summarises CCCs generated, purchased, and surrendered. Final compliance (demonstrating the entity met its target through internal measures or CCC purchases) must be completed within nine months of cycle-end. Non-compliance triggers Environmental Compensation equal to twice the average traded CCC price.
The ACVA bottleneck is the most underappreciated operational risk in CCTS Phase 1. Only 50 to 60 ACVAs are provisionally active (TIC Council India / BEE). Against a compliance universe of approximately 490 entities across seven sectors — each requiring an annual site audit, data review, and verification report — this implies a ratio of approximately 8 to 10 entities per ACVA. In practice, conflicts of interest (ACVAs that also provide advisory services to the same entities they verify) and geographic concentration of verifiers will reduce effective capacity further. Entities that have not yet contracted an ACVA for FY2025-26 are at direct risk of missing the July 31 Form A deadline.
The ICM Portal (Indian Carbon Market Portal) launched March 21, 2026, as the central digital backbone of the Indian Carbon Market. It enables end-to-end processes: entity registration, MRV document management, ACVA validation and verification workflows, CCC issuance, and registry operations (managed by Grid Controller of India Limited). The Portal also includes Article 6 Paris Agreement functionality for cross-border crediting, positioning India to link with international carbon markets in later phases. For FY2025-26 compliance, all submissions — MRV plans, performance assessments, and CCC transactions — must flow through the Portal.
Phase 1 GEI reduction ambition (FY2025-26) is modest — approximately 1 to 3% across most sectors, tightening to 2 to 8% in Phase 2 (FY2026-27). Iron and steel entities face 2 to 3% reduction in Phase 1, tightening to 4 to 6% in Phase 2. Cement entities face approximately 2% in Phase 1, 2.5 to 3% in Phase 2. Aluminium sector targets were gazette-notified at approximately 1.7% in Phase 1 (from the October 2025 gazette). These targets are intensity-based — a plant that grows production faster than its GEI falls will still accumulate CCC deficit. CCTS offers unlimited CCC banking (surplus CCCs can be held for future years) but no borrowing (future CCCs cannot be used for current compliance).
The compliance calendar — what must happen and when
India’s CCTS compliance cycle has a specific sequence of milestones that obligated entities must navigate for FY2025-26. Several of these milestones are already past or immediately current. Understanding the exact sequence is essential because delays at any step — particularly in ACVA engagement — compound forward and can make the July 31 Form A deadline impossible to meet even with good internal data systems.
All GEI targets are set relative to FY2023-24 actual performance. Entities that have not yet reconstructed their FY2023-24 gate-to-gate GHG inventory with the precision required for CCTS compliance (Scope 1 fuel-specific NCVs, Scope 2 using CEA grid emission factor, process emissions with sector-specific methodologies) must do so now as the foundation for all subsequent reporting.
Obligated entities were required to submit their Monitoring and Verification Plans — describing data collection systems, metering infrastructure, emission factor sources, ACVA engagement, and internal GHG accounting procedures — through the ICM Portal. Entities that have not submitted an MRV plan or have submitted an incomplete plan need to address this immediately.
October 8, 2025 gazette: aluminium, cement, chlor-alkali, pulp and paper (final targets at approximately 16% less stringent than April 2025 draft, reflecting prorated adjustment for late notification). January 16, 2026 gazette: petroleum refining, petrochemicals, textiles, secondary aluminium. From these gazette dates, compliance is legally binding for the respective FY2025-26 compliance year.
Power Minister Manohar Lal Khattar launched the Indian Carbon Market Portal at the Prakriti 2026 International Conference on Carbon Markets in New Delhi. The Portal is the central digital infrastructure for all CCTS processes: entity registration, MRV workflow management, ACVA accreditation, CCC issuance by BEE, registry operations by Grid Controller of India Limited, and trading platform connectivity for power exchanges.
This milestone is current. Obligated entities must submit a 5-year climate action plan and an annual activity plan for FY2025-26 through the ICM Portal. These documents describe the entity’s GEI reduction roadmap, planned abatement investments, technology choices, and compliance strategy. They also serve as the planning basis that ACVAs reference during verification. Entities without a submitted action plan are in breach of a current compliance obligation.
The most critical near-term deadline. Within four months of FY2025-26 close (March 31, 2026), obligated entities must submit Form A to BEE through the ICM Portal. Form A reports: total Scope 1 and Scope 2 emissions for the year; total production (in the appropriate unit of equivalent product); GEI achieved; GEI target for FY2025-26; and CCC surplus or deficit calculation. Crucially, Form A must be verified by a BEE-accredited ACVA before submission. The ACVA must complete site visits, document reviews, data verification, and issue a Verification Report. BEE then conducts a completeness check (10 working days) and technical review (30 days) before issuing CCCs to surplus entities. Entities that have not contracted an ACVA are at immediate risk of missing this deadline.
CCC trading is expected to commence on India’s regulated power exchanges — IEX, PXIL, and HPOWERT — under CERC oversight. No OTC (over-the-counter) trading is permitted in Phase 1; all transactions go through regulated exchanges. No derivatives or short selling. Unlimited banking of surplus CCCs across compliance years. No borrowing of future CCCs. The price collar (floor and ceiling) has not yet been publicly confirmed for Phase 1; analyst estimates range from Rs 600 to Rs 1,200 per tCO₂e.
Form D summarises the entity’s final compliance position: CCCs generated (from Form A surplus), CCCs purchased on exchanges, and CCCs surrendered to cover the compliance obligation. Entities that missed their GEI target must have purchased sufficient CCCs on the exchange before this deadline to avoid Environmental Compensation.
The entity either demonstrates full compliance (GEI target met through internal abatement, or deficit covered by purchased CCCs surrendered via Form D) or faces Environmental Compensation imposed by the Central Pollution Control Board. Environmental Compensation = 2× the average price at which CCCs traded during the compliance year. At an expected CCC price of Rs 800/tCO₂e, this would be Rs 1,600/tCO₂e for each tCO₂e of deficit — a severe financial penalty that dwarfs the cost of timely abatement investment.
What Form A requires — the GHG accounting precision that matters
Form A is not a high-level summary. It is a plant-level GHG emission inventory verified to the same standards as a statutory audit. CCTS’s gate-to-gate methodology requires the entity to account for every significant emission source within the plant boundary — fuel combustion (each fuel type separately, with actual net calorific values), process emissions (calcination in cement, PFC in aluminium, N₂O in nitric acid), electricity consumption multiplied by the latest CEA grid emission factor (WAEF for FY2024-25 = 0.710 tCO₂/MWh), and steam imports where applicable. Biomass emissions, renewable energy generation, and carbon capture and utilisation are excluded from the intensity calculation on the credit side.
The GEI calculation formula is: GEI = Total GHG emissions (tCO₂e) divided by units of equivalent product produced. The CCC surplus formula is: CCCs earned = (GEI Target minus GEI Achieved) multiplied by units of equivalent product. If GEI Achieved is below GEI Target, the entity earns CCCs. If GEI Achieved exceeds GEI Target, the entity must purchase and surrender CCCs equal to: (GEI Achieved minus GEI Target) multiplied by units of equivalent product. The precision of the denominator — “units of equivalent product” — matters significantly for multi-product plants and for plants with significant production variability through the year.
Due: ~July 31, 2026 (4 months after FY close)
Verified by: BEE-accredited ACVA (mandatory)
Contains: Total Scope 1+2 emissions; production volume; GEI achieved vs target; CCC surplus or deficit calculation; MRV plan update
BEE review: Completeness check (10 working days) + technical review (30 days+) before CCC issuance
Applies to: Non-obligated entities registering voluntary offset projects
Purpose: Register eligible offset projects (RE, green H₂, mangroves, biogas, etc.) for CCC issuance under the voluntary mechanism
Note: Not directly relevant to compliance-mechanism obligated entities unless they also register voluntary projects
Applies to: Voluntary offset project developers
Purpose: Annual monitoring report for ongoing offset projects demonstrating emission reductions achieved against the approved methodology
Verified by: ACVA before CCC issuance under offset mechanism
Due: Within 2 weeks of last trading session
Verified by: Self-submitted (summarises trading activity)
Contains: CCCs generated (from Form A); CCCs purchased on exchange; CCCs surrendered; net compliance position
Triggers: If deficit not covered, CPCB imposes Environmental Compensation = 2× average traded CCC price
Phase 1 and Phase 2 reduction targets — what is actually required
| Sector | Gazette date (final) | Phase 1 reduction FY2025-26 | Phase 2 reduction FY2026-27 | Key notes |
|---|---|---|---|---|
| Aluminium | October 8, 2025 | ~1.7–2% vs baseline GEI | ~3–4% vs baseline GEI | Gazette targets confirmed at plant level (session data). Sector average GEI ~16.98 tCO₂/t; global avg ~15.1 tCO₂/t. Scope 1+2 GEI coverage. RE transition is the dominant lever. |
| Cement | October 8, 2025 | ~2% vs baseline GEI | ~2.5–3% vs baseline GEI | 187 entities notified; Andhra Pradesh (21) and Rajasthan (20) have most entities. White cement highest GEI sub-sector (~0.93 tCO₂/t clinker); Ordinary Portland ~2.90 tCO₂/t. |
| Chlor-alkali | October 8, 2025 | ~1–2% vs baseline GEI | ~2–4% vs baseline GEI | Scope 1+2 coverage. Membrane cell technology transition is key abatement lever. Electricity dominates energy input. |
| Pulp and paper | October 8, 2025 | ~1–2% vs baseline GEI | ~2–4% vs baseline GEI | Sub-sectors: integrated, RCF-based, agro-based, specialty. Wide GEI range across sub-sectors. |
| Petroleum refining | January 16, 2026 | ~1–2% vs baseline GEI | ~2–4% vs baseline GEI | 21 refineries; IOCL Guwahati highest GEI (~7.77 tCO₂e/MBBL); Reliance Jamnagar SEZ lowest (~4.74 tCO₂e/MBBL). GEI in tCO₂e per thousand barrels of throughput. |
| Petrochemicals | January 16, 2026 | ~1–2% vs baseline GEI | ~2–4% vs baseline GEI | Includes feedstock-intensive processes; GEI accounting complex due to multiple co-products. |
| Textiles | January 16, 2026 | ~2% vs baseline GEI | ~2.5% vs baseline GEI | 4 sub-sectors: composite (highest GEI ~7.24 tCO₂e/t), processing (4.66), spinning (3.00), and one more. Composite has highest ambition gap. |
| Iron and steel | Pending (in June 2025 draft) | 2–3% (draft) | 4–6% (draft) | 253 entities; Chhattisgarh (62) and Odisha (60) have most. BF sector GEI baseline 2.36 tCO₂/t. Sub-sectors: BF, EAF, sponge iron, ferro alloys (highest ~5.36 tCO₂e/t). |
| Fertiliser | Pending (in June 2025 draft) | ~1–2% (draft) | ~2–4% (draft) | ~20 major plants; IFFCO, RCF, NFL, GSFC, FACT, Chambal. GEI 1.4–2.6 tCO₂/t fertiliser. N₂O abatement is highest-leverage lever. |
The ACVA bottleneck — why this is the most urgent operational risk
The TIC Council India analysis submitted to BEE in early 2026 identified a structural capacity shortage in CCTS’s verification infrastructure. Only 50 to 60 ACVAs are provisionally active and available for CCTS verification work. Against a current compliance universe of approximately 490 entities across seven sectors, this implies approximately 8 to 10 entities per ACVA in Phase 1 — and this will grow to approximately 12 to 15 entities per ACVA once iron and steel (253 entities) and fertiliser (~20 entities) join the compliance mechanism.
The verification workload is substantial for each assignment. An ACVA team must conduct a site audit (typically two to three days on-site for large industrial facilities), review fuel consumption records by fuel type and supplier, verify production records and unit conversions, review the NCV (net calorific value) test certificates for each fuel, check the electricity purchase data against grid emission factor calculations, assess process emission sources against sector-specific methodologies, and then compile and issue a formal Verification Report. For a large aluminium smelter, cement plant, or petroleum refinery with multiple emission sources, the documentation burden alone typically requires several weeks of office work following the site visit.
The capacity constraint is compounded by two additional problems identified by TIC Council India. The first is conflicts of interest: a significant fraction of the provisionally accredited ACVAs also provide carbon accounting advisory services to industrial entities — creating situations where the same firm that helped design the GHG monitoring system is being asked to verify that system’s outputs. BEE has been urged to address this through clear conflict-of-interest guidelines but has not yet finalised them. The second is geographic concentration: most active ACVAs have offices in major cities (Mumbai, Delhi, Hyderabad, Chennai) while the highest-concentration compliance entities are in Chhattisgarh, Odisha, and Jharkhand. Site visits to these states require travel planning that is not reflected in the apparent verifier-to-entity ratio.
Any obligated entity that has not yet contracted an ACVA for FY2025-26 verification should treat this as a board-level emergency. The practical steps are: (1) Identify provisionally accredited ACVAs from BEE’s published list and confirm their sector-specific competency for your GHG emission profile (process emissions in aluminium require PFC expertise; cement requires calcination expertise; petrochemicals require complex co-product allocation methodology familiarity). (2) Confirm the ACVA has no conflict of interest with your facility — they should not be the same firm providing GHG advisory services to your plant. (3) Contract and schedule the FY2025-26 verification now, with site visits agreed for May to June 2026 to allow time for the Verification Report to be finalised and Form A submitted by July 31. (4) In parallel, complete the April 2026 obligation: submit the 5-year climate action plan and FY26 annual activity plan through the ICM Portal. An entity without a contracted ACVA in April 2026 may not be able to find one in time for the July 31 deadline — verifier capacity is already constrained and will tighten as the deadline approaches.
The ICM Portal — what the March 21 launch changes
The Indian Carbon Market Portal, launched on March 21, 2026, is the central digital infrastructure that makes CCTS compliance operational rather than merely regulatory. Before the Portal launch, the compliance framework existed in legal instruments (the CCTS 2023, the GEI Target Rules, the Detailed Procedure for the Compliance Mechanism) but lacked the digital architecture through which entities could register, submit documents, and ultimately earn or purchase CCCs. The Portal closes this gap.
For obligated entities, the Portal’s key functions are: entity registration and profile management; MRV plan submission and version control; Form A upload and ACVA verification workflow routing (the ACVA issues its Verification Report through the Portal, which is then reviewed by BEE’s Technical Committee); CCC issuance and registry credit to the entity’s account (managed by Grid Controller of India Limited); and exchange connectivity for trading. For voluntary offset project developers, the Portal also enables project registration under BEE’s eight approved offset methodologies and CCC issuance from verified offset projects.
The Portal’s Article 6 Paris Agreement functionality is particularly significant for longer-term market development. India’s National Designated Authority has been established, and the Portal is designed to allow project developers to register activities intended for cross-border crediting. This could allow Indian industrial decarbonisation projects to generate CCCs that are tradeable with EU or other national carbon markets under Article 6.2 bilateral agreements — a development that would significantly increase the demand for Indian CCCs and improve the liquidity of the domestic market.
The ICM Portal launch is significant but should not be confused with the full operationalisation of CCC trading. As of April 2026, the Grid Controller of India Limited registry — which actually holds and transfers CCC balances — is being integrated with the power exchange trading systems. CERC oversight of exchange trading has been established but the price collar (floor and ceiling prices for CCC trading) has not yet been publicly notified for Phase 1. Exchange connectivity testing was ongoing. The Power Minister indicated first trading by mid-2026; some analysts cite October 2026 as more realistic if registry integration testing drags. Entities that earn CCC surpluses from Form A cannot monetise them until trading commences — but the surplus accrues to their registry account from the date of BEE issuance and can be banked for future compliance years.
Frequently Asked Questions
How many entities currently have legally binding CCTS compliance obligations and what are their sectors?
As of April 2026, approximately 490 entities across seven sectors have legally binding GEI targets and compliance obligations from FY2025-26. The seven sectors are: aluminium, cement, chlor-alkali, and pulp and paper (gazette-notified October 8, 2025); and petroleum refining, petrochemicals, and textiles (gazette-notified January 16, 2026). Iron and steel (~253 entities, predominantly in Chhattisgarh and Odisha) and fertiliser (~20 entities) are in the June 2025 draft notification and pending final gazette notification. Once all nine sectors are notified, the total universe will be approximately 740 entities covering over 700 Mt CO₂e annually — one of the world’s largest emissions trading systems by coverage volume.
What is the Form A deadline and what happens if an entity misses it?
Form A (the Performance Assessment Document) must be submitted within four months of the FY2025-26 close — approximately July 31, 2026. Form A must be verified by a BEE-accredited ACVA before submission. BEE then conducts a completeness check (10 working days) and technical review (30+ days) before issuing CCCs to surplus entities. If an entity fails to submit Form A on time or submits an unverified report, it cannot progress through the compliance cycle. If it subsequently fails to meet its GEI target and cannot surrender sufficient CCCs, the Central Pollution Control Board imposes Environmental Compensation equal to twice the average traded CCC price — estimated at approximately Rs 1,200 to Rs 1,600/tCO₂e if the CCC price is in the Rs 600 to Rs 800 range.
Why are ACVAs in short supply and what can obligated entities do?
Only 50 to 60 ACVAs are provisionally active for CCTS verification work as of early 2026 (TIC Council India analysis submitted to BEE). Against approximately 490 currently obligated entities — growing to ~740 once all nine sectors are notified — this creates a ratio of 8 to 15 entities per ACVA, which is insufficient given the site visit, document review, and reporting workload per verification engagement. Conflicts of interest (some ACVAs also provide advisory services) and geographic concentration of verifiers (mostly metro cities, not industrial clusters in Chhattisgarh, Odisha, Jharkhand) reduce effective capacity further. Entities should contract ACVAs immediately, confirm sector-specific competency, verify there is no conflict of interest, and schedule site visits for May to June 2026 to allow report preparation time before the July 31 Form A deadline.