The Government recently notified intensity of greenhouse gas broadcast intensity for 282 units of multiple companies in four sectors-alumen, cement, chlor-alcali and paper industries that trigger the initial gun for an Indian carbon market.
The notification is essential for the ‘compliance market’, namely, the ‘bond entities’ must comply with the issuance or make good weak buying carbon credit certificates and sending them to the regulator, or attractions a fine. (On the contrary, the “voluntary market” is where companies voluntarily join the emission reduction objectives, either due to market pressure or part of the ethical corporate behavior, and buy carbon compensation from the market when it cannot be high).
The compliance market works as an emission negotiation system (STDs). A forced entity (OE) is allowed a certain level of emissions. Issued by the Ministry of Energy Energy Energy (BEE), each carbon proves a ton or carbon dioxide, either in terms of Avoid emissions or gas eliminated from the atmosphere. Certificates can only be negotiated in the exchange of energy and their market price is determined by a bidding process, subject to higher and lower limits set by the agency.
“India moved from intention to implementation,” says Manish Dabkara, president and managing director of Eki Energy Services, and president of the Carbon Association of India. Eki Energy, a quoted company, provides carbon credit facilitation services.
As India enters carbon trade portals, it is worth taking into account some points.
The carbon credit scheme, notified by the Government in June 2023, called nine sectors for inclusion in the compliance market. Although emission intensity objectives have been announced for four sectors, the rest: fertilizers, iron and steel, petrochemicals, oil refinery and textiles, have not yet been covered. The nine sectors together represent only 16 percent of India’s emissions. The high -agriculture and electricity generation sectors of high agriculture are part of the voluntary market. So, there is a long way to go.
In addition, broadcast intensity objectives for 2025-26 and 2026-27 have been announced. This is probably the development phase, with an approach to the collection of experience, data collection, capacity development and fine adjustment policies and institutions.
In a recent article, experts Abhinav Jindal, Senior Faculty, Power Management Institute; Shivam Puri, an independent researcher; and Girish Shrimali, head of Transition Finance Research, Sustainable Oxford Finance Group, University of Oxford (United Kingdom), recommending a three-phase approach to build carbon markets in India: Development phase (2025-27); Transition phase (2028-31), where other market instruments, such as renewable energy certificates and energy saving certificates (ESCERT) are linked to the carbon market; and complete implementation phase (2032-35).
The government announcement of the emission intensity objectives for 2025-27 seems to be in line with these recommendations.
LESSONS OF THE PAST
India has had experience in carbon trade in the form of two instruments: REC (issued to renewable energy companies that choose not to sell energy for a premium); And Escrts (issued to ‘designated consumers’ under the scheme ‘perform, achieve, trade’ or bee pat). Energy efficiency achievements against a set of designated consumers that can be negotiated.
Now, as India reaches the carbon credit trade, it is necessary to learn from the Rec and Escert experience.
Excess of Escert’s offer
Is it the objective or rigid of GHG’s issuance intensity of the Government Unit? An easy goal would defeat the purpose of the purpose, while a rigid one could lead to inflation, since companies generate the high cost of fulfilling their sale price. The objective configuration is, therefore, the most critical aspect of carbon trade.
Jindal, Puri and Shrimali stop in this aspect in detail in their work. “One of the Major Learnings from Pat Market is Their Lax Targets, WHERE SIVERAL INDUSTRIAL SECTORS INCUSTUDING POWER SECTOR ENTISIES, OVERACHÍEDE ES Papering, The Papering, The Papering, The Pape Consultations and Negotiones with Industry Representatives, and Should Be Based On Robust Empirical Allocation Methodologies.
Dabkara wants the government to act as a market stabilizer, buying market loans in case of an excess of supply and selling them in international markets.
Transparency
Then there is the appearance of the application. For years after the introduction of records, renewable energy companies held lots without enough buyers, since the various state electricity regulation commissions hesitated to enforce the mandatory renewable purchase bondigation. Jindal, Puri and Shrimali point out that in the PAT market, the entities initially did not comply with the regulation, since they could not buy the ESCERT, while the regulator could not be a request in these entities. “The fine is an important characteristic proposed by this study, which must be strictly imposed to avoid incidents of non -compliance and delay compliance by the entities in Indian engraving,” says the document.
Then there are problems related to the integrity of carbon credits. India has been an important exporter or carbon credits. Tata Power points out in his comments to the carbon credits regulations that India represents 30 percent of the global carbon credits. Bee standards to issue carbon credit certificates to volunteer market actors should inspire confidence in the authenticity of emission reduction claims. In all, the Indian carbon market would have to be linked to global markets to attract more participants, leading to more lycuity and stability. As such, at the regulatory level, India would need to adhere to international standards and work closely with other leaders’ markets and carbon institutions, Jindal say, et al. They important that the Indian carbon market establishes all displacements, Ethsure reductions and assignment issuance is easily accessible to the public.
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Posted on April 27, 2025
