India CCTS — Frequently Asked Questions

The Carbon Credit Trading Scheme (CCTS), established under the Energy Conservation (Amendment) Act, 2022, creates a domestic carbon market for India. It comprises a compliance mechanism for energy-intensive sectors (assigned annual greenhouse gas emission intensity targets) and a voluntary offset mechanism. Entities that perform better than their target are issued Carbon Credit Certificates (CCCs), while those that miss their targets must purchase CCCs for compliance.

Obligated Entities are industrial facilities and companies notified under CCTS. The designated sectors include Cement, Aluminium, Iron & Steel, Thermal Power, Chlor-Alkali, Fertilizer, Pulp & Paper, Textiles, Petroleum Refineries, DISCOMs, Hotels, and Railways.

The primary CCTS compliance metric is GHG emission intensity, calculated as: GHG Intensity = Total GHG Emissions (tCO2e) / Equivalent Product Output. The units differ by sector; for example, cement plants use tCO2e per tonne of clinker/cement equivalent, power plants use tCO2e per MWh, and hotels use a building-area based metric (tCO2e per 1000 square meters per year).

The compliance boundary is 'gate-to-gate' around the obligated entity's establishment. It includes direct energy emissions (fuel combustion), direct process emissions (chemical reactions, e.g., calcination), and indirect energy emissions (purchased electricity and imported heat). Exclusions include colony energy, outside transportation, temporary construction, and certain refrigerant leakages.

During the transitional period from 2024 to 2027, the compliance GHG-intensity targets are calculated based only on Direct Energy + Indirect Energy (electricity/heat) emissions. Direct process emissions (such as limestone calcination in cement or carbon consumption in aluminium) must be monitored and reported, but are not factored into the compliance intensity targets until subsequent trajectory periods.

GCV (Gross Calorific Value) is the total heat released by fuel combustion including water vapor condensation. NCV (Net Calorific Value) excludes the latent heat of water vaporization. CCTS explicitly requires NCV for all emission calculations. If laboratory test data for NCV is not available, a default conversion must be applied: GCV is reduced by 5% for solid/liquid fuels (NCV = GCV × 0.95) and by 10% for gaseous fuels (NCV = GCV × 0.90).

Type I emission factors are default values provided by central guidelines or IPCC. Type II emission factors are plant-specific, fuel-specific, or material-specific factors derived from actual laboratory analysis. The guidelines state that entities should strive to use Type II factors for any source stream that contributes more than 10% of the facility's overall emissions.

No. The CCTS guidelines explicitly state that the purchase of Renewable Energy Certificates (RECs) is NOT considered as a claim towards renewable energy under the compliance mechanism. On-site renewable generation and valid off-site green power procurement (such as direct solar PPAs) are treated as zero-emission inputs, but RECs cannot be used to offset emissions.

Biomass and biogenic emissions are reported separately as biogenic emissions and are not included in the main CCTS total greenhouse gas emissions calculation. For instance, if a paper mill burns 20,000 tonnes of coal and 10,000 tonnes of biomass, only the coal emissions are included in the compliance intensity metrics.

The number of CCCs issued or required is calculated using the formula: CCC = (Target Intensity - Achieved Intensity) × Production. A positive result indicates a CCC entitlement (surplus), where certificates are credited to the entity's registry account. A negative result indicates a compliance shortfall, requiring the entity to purchase the equivalent number of CCCs from power exchanges.

• Form I: Annual energy consumption and GHG emissions submission.
• Form A: Performance Assessment Document, summarizing target achievement.
• Form B: Certificate of Verification, issued by an accredited verifier within 3 months of the compliance cycle end.
• Form C: Certificate of Check-Verification, issued if the Bureau conducts an independent check audit.
• Form D: Compliance of Greenhouse Gas Emission Norms Document, proving final settlement (via trading or banking) submitted within 9 months of the compliance cycle end.

The CCTS allows qualifying captured or utilized CO2 to be deducted from direct emissions, provided the plant demonstrates permanent storage and maintains a strict monitoring/quantification audit trail for the transferred CO2.