The three are Sandeep Singh Dosanjh, 30, Ranjot Singh Chahal, 35, and Navdeep Singh Gill, 31.
Dosanjh reportedly used the money grained fraudulently to buy a house in an upmarket London neighbourhood worth 1 million pounds, and a Roll Royce.
The sentences were delivered at the Southwark Crown Court: Dosanjh was jailed for 15 years while Gill was sentenced to 11 years and Chahal was locked up for nine years, the Daily Mail reported.
The three cheated the government out of 39 million pounds in just 69 days in what is considered to be the first case of its kind in the UK.
The law has now been changed to prevent carbon credit VAT fraud as a direct result of this case.
The three were arrested in December 2009.
Dosanjh, considered the mastermind of the scam, and his two friends Chahal and Gill made the millions running a series of bogus companies importing high-value carbon credits free of VAT into the UK.
EU emission allowances are known as carbon credits and are certificates which can be bought and sold representing the right to emit carbon dioxide into the atmosphere.
They were created as part of national and international attempts to reduce greenhouse gases.
The report said that the three exploited UK VAT laws and sold these carbon credits on to legitimate companies, charging VAT which was never paid back to the government.
The bogus importing companies were then dissolved and the credits were sold on again between three further 'buffer' companies