India's carbon credit trading scheme spins a maze of regulatory complexity

A complex and unwieldy regulatory and monitoring process could raise the costs for Indian companies

The carbon credit trading mechanism that India will roll out offers domestic companies a path to adjust to the European Carbon Adjustment Mechanism that has raised the bar for exports. The CBAM will begin with a transitional phase with effect from October this year for certain carbon-intensive goods such as cement, steel aluminium and fertilisers.

On June 28, the power ministry issued a notification announcing the Carbon Credit Trading Scheme (CCTS), 2023. Quoting an unnamed government official, S&P Global Commodity Insights said, “The actual trades of carbon credits on Indian exchanges are about 18 months away.”

This time lag is