On 30th June 2023, the Ministry of Power notified the “Carbon Credit Trading Scheme, 2023”, to develop India’s first domestic regulated carbon credit trading market.
- The scheme was 1st announced under the Energy Conservation (Amendment) Bill, 2022.
- The scheme was drafted by the Bureau of Energy Efficiency(BEE), a statutory body under the Ministry of Power.
The emphasis on reducing carbon emissions is in line with India’s target to achieve net zero by 2070.
About Carbon Credit Trading Scheme, 2023:
i.The Carbon Credit Trading Scheme, 2023, entails the formation of a National Steering Committee(NSC), a technical committee, an Accredited Carbon Verification Agency and the Central Electricity Regulatory Commission (CERC) as the carbon market regulator.
ii.The Grid Controller of India Limited (GRID-INDIA) will be the registry for the Indian carbon market.
iii.BEE will also constitute technical committees for diverse areas as needed under the compliance of mechanisms for this scheme.
National Steering Committee(NSC):
The National Steering Committee(NSC), constituted of 20-22 members, will be headed by the
- secretary for Ministry of Power as the ex-officio chairperson while the
- secretary for the Ministry of Environment, Forest and Climate Change (MoEF&CC) will be co-chairperson.
The Members of the committee will also include representatives from the Ministries of Finance, Ministry of New and Renewable Energy(MNRE), Ministry of Steel, Ministry of Coal and Minister of Petroleum and Natural Gas(MoPNG), and NITI Aayog (National Institution for Transforming India) among others.
Note : Current Secretary of Power is Shri Pankaj Agarwal and Secretary of MoEF&CC is Ms. Leena Nandan
Functions of NSC:
i.The NSC will govern and oversee the domestic carbon market.
Under the guidance of NSC, BEE will finalise the procedures for institutionalizing the Indian carbon market and formulate the rules and regulations.
- BEE will also identify the sectors, set targets for reduction in emissions, issue carbon credit certificates and accredit the carbon verification agencies.
Central Electricity Regulatory Commission (CERC):
i.CERC has been mandated as the regulator for trading activities.
ii.CERC will register the power exchanges and approve the carbon credit certificate trading in the Indian carbon market.
iii.The power exchange will get approval from CERC for their bylaws and rules for the trading of certificates in power exchange.
What is Carbon credit?
A carbon credit is the value assigned to the reduction, removal or avoidance of GHG emissions achieved and is equivalent to one tonne of carbon dioxide equivalent (tCO2e)
Key Points:
i.The notification did not mention any activities that are eligible under the carbon trading scheme.
- Carbon credit market in India could reach USD 200 billion by 2030 from the current USD 2 billion.
ii.The Ministry of Power will recommend the notification of greenhouse gas(GHG) emission intensity targets to MoEF&CC.
The obligated entities are required to achieve the GHG emission intensity in accordance with the targets and they also have to meet the other targets like use of non-fossil energy consumption or specific energy consumption.
- Entities that achieve the set targets will be issued carbon credit certificates and entities that fail to achieve the targets will meet the shortfall by purchasing the certificate from the carbon market.
About Ministry of Power
Union Minister – Shri Raj Kumar Singh,Constituency – Arrah(Bihar)
Minister of State– Krishan Pal (Constituency- Faridabad, Haryana)
Secretary – Shri Pankaj Agarwal
