CCTS 2026: The Complete Guide to India's Carbon Credit Trading Scheme

What is the Carbon Credit Trading Scheme (CCTS)?

The CCTS is the legal and market framework that turns India's climate targets into something businesses can trade. It was notified in 2023 under the Energy Conservation (Amendment) Act, 2022, which empowered the central government to specify a carbon trading scheme and to issue carbon credit certificates.

Under the scheme, one carbon credit equals the reduction, removal or avoidance of one tonne of carbon dioxide equivalent (tCO₂e). A unit issued under the scheme is called a Carbon Credit Certificate, or CCC. The goal is to put a financial price on emissions so that cutting carbon becomes a profitable business decision rather than just a cost.

This is a shift from India's older Perform, Achieve and Trade (PAT) energy-efficiency programme. PAT measured energy savings; the CCTS measures actual greenhouse-gas emission intensity, which is a more accurate basis for decarbonisation. The covered sectors are transitioning from PAT to the CCTS.

Who runs the CCTS?

Three government bodies divide the responsibilities, and it helps to know which one does what:

Body	Role
Bureau of Energy Efficiency (BEE)	Administrator. Develops methodologies, benchmarks and Measurement, Reporting & Verification (MRV) protocols; accredits verifiers; oversees the offset mechanism.
Ministry of Environment, Forest and Climate Change (MoEFCC)	Notifies the actual emission-intensity targets and aligns the scheme with India's Net Zero 2070 goal.
Grid-India	Operates the registry where CCCs are issued, held and tracked.
Ministry of Power / CERC	Policy oversight and trading-related regulation.

How does the CCTS work? Two mechanisms

The scheme has two parallel tracks. Knowing which one applies to you is the first decision.

Compliance mechanism (for large emitters)

Obligated entities receive a GHG emission-intensity target — emissions per unit of output — for each compliance year. A company that performs better than its target earns CCCs it can sell. A company that falls short must buy CCCs to cover the gap. Because targets are set per unit of output rather than as a hard cap, an efficient plant can grow production and still earn credits.

Offset mechanism (for everyone else)

This is the entry point for sectors outside the compliance net — energy, industry, waste, agriculture, forestry and transport. Non-obligated entities can register projects that reduce or remove emissions, earn CCCs, and sell them to obligated companies topping up their compliance, or to voluntary buyers chasing net-zero pledges. This mechanism is operational now, which means farmers, FPOs, MSMEs, renewable developers and waste firms can already begin building projects.

BEE has approved a set of offset methodologies, including agroforestry, biochar, systematic rice intensification, mangrove afforestation, green hydrogen and pumped-hydro storage.

Which sectors are covered under CCTS compliance?

As of FY2025-26, seven energy-intensive sectors carry legally binding targets. They were notified in two waves:

Notified	Sectors
October 2025	Aluminium · Cement · Chlor-alkali · Pulp & paper
January 2026	Petroleum refining · Petrochemicals · Textiles

Targets are set at the sub-sector level and run as a trajectory up to 2030, derived from India's Nationally Determined Contribution and sector-specific abatement potential. Two more of the originally planned nine sectors (which include iron and steel) are expected to follow.

What is a Carbon Credit Certificate (CCC)?

A CCC is the tradable unit of the Indian Carbon Market. Each certificate represents one tonne of CO₂ equivalent reduced, removed or avoided beyond a company's assigned target (compliance) or under an approved project methodology (offset). CCCs are issued by the Grid-India registry and can be traded on designated power exchanges once trading opens.

What is the CCTS timeline for 2026-27?

The scheme is moving from policy to practice on a fixed calendar. The dates that matter most:

When	Milestone
April 2025	First compliance period begins; FY2025-26 targets take effect
April 2026	Obligated entities submit action plans to BEE
Mid-2026	MRV reporting — verified FY2025-26 emissions data due
~October 2026	First CCC trading expected to open on the exchange
March 2027	Close of the second compliance year (steeper targets)
30 Sep 2027	Unrelated but critical for exporters: first EU CBAM declaration due

The practical takeaway: by mid-2026, obligated facilities need a complete, third-party-verified inventory of their FY2025-26 emissions. That means monitoring systems, data processes and verification contracts have to be in place now — not closer to the deadline.

What should your business do now?

Whether you're a compliance officer at a cement plant or a developer eyeing the offset market, the early moves are similar:

1. Confirm your status. Are you an obligated entity in one of the seven sectors, or a candidate for the offset mechanism?
2. Run a baseline GHG audit using a BEE-accredited verifier.
3. Set up digital MRV — manual spreadsheets do not scale across facilities and compliance cycles.
4. Register on the Grid-India registry when your window opens.
5. Model your position — are you likely to be a credit seller (over-performer) or a buyer (deficit)?
6. Plan your trade or project before the October 2026 trading window.

How a carbon-market consultant helps

The scheme is detailed and the targets are sector-specific, so most participants don't go it alone. A consultant interprets your notified target, builds the MRV system, coordinates BEE-accredited verification, handles registry registration, and — for offset projects — selects the right methodology and prepares the Project Design Document through to issuance.

Ready to assess your CCTS position? Our CCTS Compliance Advisory team can interpret your target, set up MRV, and map whether you're a credit seller or buyer. Book a free eligibility assessment to get started.

This guide is current as of June 2026. CCTS timelines and notifications are evolving — verify the latest dates with BEE and MoEFCC before acting.