Carbon Credits Trading Scheme

Context:

The government proposes to implement its own version of a carbon credit trading scheme (CCTS) around mid-2026.

Carbon Credit Trading Scheme (CCTS):

• A market-based mechanism introduced under the Indian Carbon Market (ICM) to regulate and trade carbon credits.
• Notified by Ministry of Power in 2023, amending the Energy Conservation Act, 2021
• Aims to decarbonize India’s economy by pricing greenhouse gas (GHG) emissions and enabling carbon trading.
• Carbon Credit Certificates (CCC) – Each certificate represents a one-tonne CO₂ equivalent (tCO₂e) reduction.
• Mechanisms –
  • Compliance Mechanism – Mandates sector-specific GHG reduction targets for energy-intensive industries (e.g., Aluminium, Cement, Fertilizers, Iron & Steel).
    • Entities exceeding targets earn CCCs, while others must purchase credits.
  • Offset Mechanism – Allows voluntary participation for entities outside the compliance framework to reduce emissions and earn carbon credits.
• Identified Sectors – Initially focuses on energy-intensive industries like iron & steel, aluminium, cement, fertilizers, petroleum refineries, pulp & paper, and textiles (16% of India’s emissions).
  • Power sector (40% of emissions) may be included later.
• Regulatory Oversight – By bodies like the Bureau of Energy Efficiency (BEE) and the National Steering Committee for Indian Carbon Market (NSCICM).

Source: FE

---

Previous Year Question

Consider the following activities:
1. Spreading finely ground basalt rock on farmlands extensively
2. Increasing the alkalinity of oceans by adding lime
3. Capturing carbon dioxide released by various industries and pumping it into abandoned subterranean mines in the form of carbonated waters
How many of the above activities are often considered and discussed for carbon capture and sequestration?

[UPSC Civil Services Exam – 2023 Prelims]

(a) Only one
(b) Only two
(c) All three
(d) None

Answer: (c)

---