The Bureau of Energy Efficiency (BEE) has approved ten sectors for the Carbon Credit Trading System, including renewable and non-renewable energy, industries, transport, and carbon capture sectors.

According to the recommendations of the National Steering Committee for the Indian Carbon Market (NSC-ICM), under the energy sector, the carbon offset mechanism will cover projects about energy industries (renewable and non-renewable), distribution, and demand, such as green hydrogen production through electrolysis, renewable energy with storage, offshore wind, green hydrogen production through biomass, and compressed biogas.

Green ammonia usage and feed switch in the integrated ammonia-urea manufacturing industry will also be covered.

This system will also cover electric vehicles/buses, carbon capture, utilization, and storage of CO2, and other removal technologies, such as post-combustion carbon capture and storage, will also be covered.

In 2022, the government introduced the Carbon Credit Trading Program through the Energy Conservation (Amendment) Act.

The Ministry of Power (MoP), in consultation with the Bureau of Energy Efficiency, launched the Carbon Trading Program 2023, outlining the processes, regulating agencies, and rules for carbon credit trading in India.

The Central Government constituted the NSC-ICM, co-chaired by the Secretary Ministry of Environment, Forest and Climate Change and the Secretary of the Ministry of Power, to directly oversee the functioning of the Indian carbon market.

Last November, the BEE issued the draft Detailed Procedure for Compliance Mechanism under the Carbon Credit Trading Program. Under the new procedure, the Ministry of Environment, Forest and Climate Change will announce the greenhouse gas (GHG) emission intensity targets for tons of carbon dioxide equivalent (tCO2e) per unit of equivalent product for each defined trajectory cycle applicable to obligated entities.

Earlier, the BEE issued a draft Accreditation Procedure and Eligibility Criteria for Accredited Carbon Verification Agencies (ACV). ACVs accredited by BEE will assess the reduction in GHG emission intensity achieved by obligated entities.