Harnessing India’s carbon market: policy, progress and prospects
India is a major exporter of carbon credits, with corporate retirement data showing that 61 million Indian generated credits were retired abroad in the past decade, while domestic demand remains comparatively low at just 600,000 domestically generated and retired credits.
With plans to launch the Indian Carbon Credit Trading Scheme (CCTS) by 2026, India is poised for substantial growth in domestic demand; 55% of India’s annual emissions could be covered under the compliance scheme once fully operational.
Carbon ratings can serve as a critical tool for managing risk as Indian corporations engage in the carbon market to meet mandatory or voluntary emissions targets.
Contents
Introduction
Carbon crediting projects in India have primarily been in the renewable energy sector, although issuances from other sectors are increasing
Domestic activity in the VCM has been low relative to global demand
The Indian government has developed and supported a number of carbon market mechanisms
India's ETS should catalyse domestic carbon credit demand
Indian carbon credit prices fall below the global average, but ratings could catalyse a value shift
India has also started developing specific regulation to participate in Article 6 carbon markets
Indian carbon market participants should be aware of project risk, and adopt ratings as a tool to manage this risk
India will continue to be a global leader in carbon credit supply
References