Comments to the Ministry of Power on the draft Carbon Credit Trading Scheme (CCTS)

The Institute for Energy Economics and Financial Analysis (IEEFA) has submitted comments to the Ministry of Power (MoP) on the draft Carbon Credit Trading Scheme (CCTS) as per one of the provisions of the December 2022 amendment to the Energy Conservation Act (2001). The ministry requested comments from sectoral stakeholders by 14 April 2023.

To achieve our Nationally Determined Contribution (NDC) targets, development of a carbon market in India will be critical. The draft CCTS outlines the roles and duties of key stakeholders and includes the structure for the proposed Indian Carbon market (ICM) (both voluntary and compliance). The methodology and process for identifying market participants, price discovery processes, monitoring, and reporting procedures are not adequately covered in the draft. In addition, the regulators need to define the vision and objective of voluntary markets clearly. How will voluntary markets help curb carbon emission and incentivize customers to shift to cleaner solutions?

Our comments and questions on some of the provisions of the proposed scheme are in the attached document.