The Ministry of Power has issued a notification introducing the Carbon Credit Trading Scheme, 2023, in exercise of the powers conferred by the Energy Conservation Act, 2001.
Under the scheme, carbon credits are defined as values assigned to the reduction, removal, or avoidance of greenhouse gas emissions, equivalent to one ton of carbon dioxide equivalent (tCO2e). The scheme establishes the necessary definitions, including those for accredited carbon verification agencies, compliance mechanisms, greenhouse gases, and more.
The National Steering Committee has been assigned several crucial functions under the Carbon Credit Trading Scheme. The committee shall consists of representatives from various ministries, government bodies, experts in emissions, carbon trading, climate change, and energy, as well as stakeholders from the power sector.
Firstly, it is responsible for recommending procedures to institutionalize the Indian carbon market, ensuring its smooth functioning. Secondly, the committee shall recommend and formulate rules and regulations pertaining to the operations of the Indian carbon market. Additionally, it recommends specific greenhouse gas emission targets for obligated entities, encouraging them to reduce their carbon footprint. The committee shall also advise on guidelines regarding carbon credit certificates outside India, and recommend the issuance of carbon credit certificates by the Bureau. Furthermore, it shall play a vital role in developing processes or conditions for the crediting period, renewal, or expiry of carbon credit certificates.
The Bureau of Energy Efficiency is designated as the administrator for the Indian carbon market. Its functions shall include sector identification for emissions reduction, development of emission targets, issuance of carbon credit certificates, development of market stability mechanisms, accreditation of verification agencies, and maintenance of the information technology infrastructure for the carbon market.
The Central Electricity Regulatory Commission shall acts as the regulator for trading activities under the Indian Carbon Market. It shall ensure the regulation of carbon credit certificate trading, safeguards the interests of buyers and sellers, and provides market oversight.
The scheme also establishes the role of the registry, which shall be undertaken by the Grid Controller of India Limited. The registry shall maintain secure databases, records transactions, assists in the development of information technology platforms, and establishes linkages with other national or international registries.
The compliance mechanism under the scheme requires obligated entities to achieve greenhouse gas emission intensity targets. Obligated entities failing to meet their targets can purchase carbon credit certificates from the Indian carbon market.
The scheme provides for the constitution of technical committees, the accreditation of carbon verification agencies, and the trading of carbon credit certificates on power exchanges.
The detailed procedures for the operationalization of the Indian carbon market will be developed by the National Steering Committee and other relevant authorities. These procedures shall cover various aspects such as issuance and validity of carbon credit certificates, price regulations, submission requirements, monitoring, reporting, and verification.
The Bureau shall empowered to issue directions and orders to registered entities for the effective implementation of the scheme.
Overall, the Carbon Credit Trading Scheme, 2023, establishes a framework to incentivize and facilitate the reduction of greenhouse gas emissions through the trading of carbon credits, promoting sustainable practices and environmental conservation.
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