CARBON TRADING SCHEME CRAWLS

Delays in setting up a carbon market in India have become a pressing concern now, especially after a UN body warned this week of the perils of going slow on emission reductions

- S DINAKAR

India may announce a new carbon trading regime, covering less than a third of its rapidly multiplying emissions, only in late 2025 or 2026, nearly three years after approval, according to several officials who spoke to Business Standard.

A senior official from a state energy company, who attended a recent meeting with officials from Niti Aayog and the Bureau of Energy Efficiency (BEE), an arm of the power ministry, which is tasked with overseeing the carbon credit trading scheme (CCTS), said that a programme to trade carbon credits will be in place by late 2025; other officials, however, spoke of a date closer to mid-2026.

The government authorised the creation of an Indian Carbon Market (ICM) in June 2023, and BEE sought industry feedback in November towards eligibility and compliance procedures for CCTS.

Things have been quiet since, with BEE officials saying that they are still working on the details.

The benefits of a carbon market take time to trickle in. India is already leaving out of CCTS heavily polluting, politically sensitive sectors such as electricity and agriculture, crimping its effectiveness, industry officials said.

India may see an impact on its air quality by 2031 only, with obligated entities under CCTS covering only 30 per cent of the country's emissions, leaving the rest unsupervised and our atmosphere exposed.

There is a "lag effect" of three-five years for a carbon market to have an impact on emissions, said Tarana Ahmad, manager, carbon market intelligence, at California-based sustainability consultant cKinetics in a presentation in Delhi last week.

Delays in creating ICM and addressing emissions threaten the country's commitments to becoming "Net Zero" by 2070. ICM would enable operation of a domestic CCTS in line with United Nations (UN) regulations and set a cap on emissions by industries.