Questions over carbon credit

The much-awaited targets for the reduction in emissions intensity under the carbon credit trading scheme (CCTS) were announced in April 2025.

- SOMIT DASGUPTA

Readers would be aware that the detailed procedure for the scheme was made public in July 2024, and this scheme will eventually take over the ongoing Perform, Achieve and Trade (PAT) scheme. Of course, the parameter that would be monitored will change from the product's energy consumed per unit to greenhouse gas (GHG) emitted per unit.

The latest notification has given the base figure for GHG emissions (2023-24) and the corresponding targets for 2025-26 and 2026-27.

A glance at the notification reveals that it is extremely small in scope and covers less than 10% of India's GHG emissions. Only four sectors are being covered initially—cement, aluminium, pulp & paper, and chlor-alkali. In all, 282 units have been identified and given their target emissions intensity. The notification is actually a draft and comments were sought by around mid-May.

Ideally, the notification should have been supplemented with a technical note, indicating how the targets have been arrived at, which apparently has been done after multiple rounds of consultations. It is, however, seen that there are large variations in the targets within each sector and they also vary across sectors. Moreover, the targets for the first year are more modest compared to the next year. Had a technical note been released along with the notification, it would have lent transparency to the entire process.