Overshoot the target and you buy credits. Beat it and you sell them.
Runs on your public disclosures. Nothing from you.
You are the Head of Sustainability at a plant inside an obligated sector: cement, iron and steel, aluminium, pulp and paper, and the others. The first compliance cycle is running. Your intensity number is calculated. You do not know if you are inside the target or outside.
The Carbon Credit Trading Scheme (CCTS) is India's national compliance carbon market, notified by the Ministry of Power on 28 June 2023 under the Energy Conservation (Amendment) Act 2022. Obligated entities in nine hard-to-abate sectors get a greenhouse-gas emission intensity target (tCO2e per tonne of output) per compliance cycle. Beating the target generates Carbon Credit Certificates (CCCs). Missing it means buying CCCs from the market or paying a penalty of INR 10,000 per tonne of CO2e in excess. The Bureau of Energy Efficiency runs the scheme.
CCTS runs in two-year compliance cycles. The first cycle covers FY 2025-26 and FY 2026-27. The Ministry of Environment, Forest and Climate Change sets sectoral GHG emission-intensity targets. Each obligated entity gets its own target under the sectoral trajectory.
One CCC equals one tonne of CO2e reduced below target. CCCs are tradeable on the Indian Carbon Market (ICM) infrastructure being built on the Indian Energy Exchange and the Power Exchange India. An offset mechanism sits alongside for voluntary participants.
Compliance is measured on a plant-by-plant intensity basis. The output metric depends on the sector: tonne of cement, tonne of crude steel, tonne of aluminium, tonne of paper, and so on. The GHG accounting method follows ISO 14064-1 with sector-specific calculation rules published by BEE.
The scheme is live now, not later. The first compliance cycle runs across FY 2025-26 and FY 2026-27. Sectoral intensity trajectories were notified through 2024. Any obligated entity that has not built a plant-level GHG intensity number is running blind into a market where a wrong number costs INR 10,000 per tonne.
Three failure modes we see on every CCTS scan.
A cement plant calculates emissions on clinker output but the CCTS target is on cement output. The intensity number is wrong by 20% either way. Compliance verifiers reject.
The plant uses a CEA grid emission factor from three years ago. BEE requires the factor for the compliance year. The intensity gets recalculated on submission and the surplus disappears.
The plant beats its target by 8%. It has no plan to monetise the surplus CCCs. The credits sit on the register for a year while sector prices decline. Value is left on the table.
Carbon-OS carries every CCTS sectoral rule: cement per tonne of cement, iron and steel per tonne of crude steel, aluminium per tonne of primary aluminium. The intensity number is calculated against the exact metric the compliance verifier uses.
The Scope 2 factor library is versioned by year and by state. The intensity number for FY 2025-26 uses the FY 2025-26 factors. The compliance filing matches the BEE calculation on submission.
Carbon-OS shows surplus or deficit against the target every month, at plant level and at group level. The trading team gets a signal, not a year-end surprise.
Four steps a Carbon-OS engagement runs for CCTS, in order.
Plant boundary drawn per BEE rules. Output metric fixed per sector (tonne of cement, crude steel, aluminium, and so on).
Scope 1 (fuels, process) and Scope 2 (grid, purchased steam) built for the compliance year. Follows ISO 14064-1.
Tonnes CO2e divided by tonnes of output. Compared against the sectoral CCTS target.
A GHG report with source-per-line, ready for the BEE-empanelled Accredited Carbon Verifier.
Plant boundary drawn. Baseline intensity calculated and reconciled with BEE trajectory.
Emissions and output tracked monthly. Live position vs target shown at group level.
For plants outside target, a defined reduction plan or a credit-purchase plan.
Accredited Carbon Verifier signs. CCTS filing lodged with BEE.
Surplus CCCs listed on Indian Carbon Market. Deficit covered from the market or the penalty is paid.
| Dimension | EU ETS | PAT Scheme (India, prior) |
|---|---|---|
| Type | Cap-and-trade on absolute emissions | Intensity-based energy-efficiency trading |
| Metric | Tonnes CO2 (absolute) | Specific energy consumption |
| Sectors | Power, industry, aviation, maritime | 13 designated energy-intensive sectors |
| Compliance mechanism | Surrender allowances every year | Meet SEC target or buy ESCerts |
Every item on this list is what an auditor asks for on CCTS work.
Case-study copy for CCTS arrives in a follow-up pass. It will slot in here.
Nine sectors in the current notification: cement, iron and steel, aluminium, pulp and paper, chlor-alkali, textiles, fertiliser, petroleum refining, and petrochemicals. The list is expected to expand.
The first compliance cycle covers FY 2025-26 and FY 2026-27. Verification and filing come after the cycle closes, in the year following.
INR 10,000 per tonne of CO2e in excess of the intensity target, converted to absolute tonnes on plant output. Payable in addition to any market purchase of CCCs to close the gap.
Yes. Surplus CCCs from one cycle can be banked for use in a future cycle, subject to the rules in force at the time of use.
No. CCTS is Scope 1 and Scope 2 at the plant, on the specified output metric. Scope 3 sits outside the compliance boundary.
An Accredited Carbon Verifier empanelled by the Bureau of Energy Efficiency. The list is published by BEE and updated periodically.
PAT was energy-efficiency-based, in specific-energy-consumption units. CCTS is GHG-intensity-based. Entities coming from PAT have to rebuild the accounting to CCTS metrics.
Yes, through the CCTS offset mechanism running in parallel. Approved project types include renewable energy, energy efficiency, and forestry projects that meet the BEE offset methodology.
The sectoral trajectory is public. The plant-level target is disclosed to the plant and the sector regulator, not published publicly by BEE.
Carbon paid under CCTS is deductible against CBAM certificates for the same tonne of embedded emissions, subject to the EU CBAM crediting rules. That is why the CCTS number and the CBAM number must reconcile.