What Is India's Carbon Credit Trading Scheme (CCTS)? A Plain-English Guide
India's Carbon Credit Trading Scheme (CCTS) is the country's official domestic carbon market, distinct from the voluntary market most agri-carbon projects use today. Here's what CCTS is, its actual status as of 2026, and how it differs from the separate agriculture carbon market framework.
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Quick answer
What is India's Carbon Credit Trading Scheme (CCTS), and does it apply to agriculture yet?
The Carbon Credit Trading Scheme (CCTS) is India's official domestic carbon market, established under the Energy Conservation (Amendment) Act, 2022 (effective 1 January 2023). It runs a Compliance Mechanism for designated large industrial emitters and an Offset Mechanism for other, non-obligated participants — with agriculture named among the categories proposed for that offset track. But as of December 2024, the government told Parliament that no carbon credits had yet been generated under CCTS at all, in any sector. It is a real, developing scheme — not yet an operational pathway for farmers.
Why India built its own scheme
For years, Indian carbon projects — including agriculture ones — have generated credits for the international voluntary carbon market, selling through registries like Verra and Gold Standard to corporate buyers worldwide. That market works, but it isn't domestically governed, and India's climate commitments created policy interest in a home-grown, regulated carbon market that channels emission reductions toward domestic targets and gives Indian industry a structured compliance pathway. CCTS, notified under the Energy Conservation (Amendment) Act, 2022 and effective from 1 January 2023, is that answer.
The two mechanisms, precisely
| Compliance Mechanism | Offset Mechanism | |
|---|---|---|
| Who it's for | "Obligated Entities" — designated large, energy-intensive industrial sectors | "Non-Obligated Entities" — voluntary participants across a broader, phased set of categories |
| How it works | Entities are assigned Greenhouse Gas Emission Intensity targets; beating the target creates a saleable surplus of Carbon Credit Certificates, missing it requires buying certificates | Registered projects that reduce, remove or avoid emissions can seek issuance of Carbon Credit Certificates after verification |
| Initial sectors named | Aluminium, Cement, Steel, Paper, Chlor-Alkali, Fertiliser, Refinery, Petrochemical, Textile | Proposed categories include Energy, Industries, Construction, Agriculture, Solvent use, Waste handling, and carbon capture/removal |
The compliance mechanism
Certain large industrial entities — the "Obligated Entities" — are assigned Greenhouse Gas Emission Intensity targets (emissions per unit of output, not an absolute cap). Entities that beat their target generate a surplus they can sell as Carbon Credit Certificates; entities that miss it must buy certificates to cover the shortfall. Nine energy-intensive sectors were named for this track: Aluminium, Cement, Steel, Paper, Chlor-Alkali, Fertiliser, Refinery, Petrochemical and Textile.
The offset mechanism
"Non-Obligated Entities" may voluntarily register projects that reduce, remove or avoid greenhouse gas emissions to seek Carbon Credit Certificates. The Bureau of Energy Efficiency has named a phased, broader set of proposed categories for this track — including Agriculture — alongside energy, industries, construction, solvent use, waste handling and carbon capture/removal.
What 'agriculture is a named category' does and doesn't mean
Agriculture being named among CCTS's proposed offset categories is real, and it signals policy intent. It does not mean there is currently a working, agriculture-specific CCTS pathway that a farmer or FPO can register a project under today. As of December 2024, the Ministry of Power confirmed to the Lok Sabha that the scheme — across every sector, not just agriculture — had generated zero carbon credits so far, more than a year after the compliance mechanism was notified. Verify current status against official Bureau of Energy Efficiency notifications before assuming any specific agriculture pathway is live.
Who runs it
Don't confuse CCTS with the separate agriculture carbon market framework
Here's the point most explainers miss: CCTS is not the only government carbon initiative touching agriculture, and it's not the most directly relevant one today. The Ministry of Agriculture and Farmers' Welfare — a different ministry from CCTS's Ministry of Power — has launched its own Framework for Voluntary Carbon Market in Agriculture Sector, alongside an accreditation protocol specifically for agroforestry nurseries, explicitly designed to help small and medium farmers access carbon markets. This sits closer to the voluntary-market projects most Indian agri-carbon programmes actually run today — see our guide on agroforestry carbon credits for how that plays out on the ground.
If someone tells you they're enrolling your farm "under CCTS," it's worth asking specifically which mechanism, which registry, and whether any credits have actually been issued under it yet — given the scheme's own disclosed status, healthy skepticism is warranted.
The bottom line for farmers and FPOs
You don't need to wait for CCTS, and you shouldn't assume it's already open to agriculture in practice. The credible, working path today is the international voluntary market — Verra, Gold Standard and similar registries — run through a transparent, properly registered project. CCTS and the Agriculture Ministry's own VCM framework are both worth watching as they develop, and rigorous, methodology-compliant projects built today are best placed to plug into either as they mature. For the broader policy direction, see our piece on the Budget 2026 carbon programme for farmers.
Want help making sense of how current policy affects your programme? Our Advisory team tracks CCTS, the Agriculture Ministry's VCM framework, CBAM and evolving regulation. Get in touch.
Current as of August 2026. General information only — not legal or financial advice. Carbon policy in India is evolving; verify current scheme status against official Bureau of Energy Efficiency and Ministry notifications before making decisions.
Frequently asked questions
What does CCTS stand for and what is it?
CCTS stands for Carbon Credit Trading Scheme — India's official domestic carbon market framework, established under Section 14 of the Energy Conservation (Amendment) Act, 2022, which took effect on 1 January 2023. It creates a national system for issuing and trading Carbon Credit Certificates (CCCs), with a Compliance Mechanism for large designated industrial emitters and an Offset Mechanism intended for other, non-obligated participants.
Is CCTS the same as the voluntary carbon market agri-projects currently use?
No — they're separate systems. Most agri-carbon projects in India today (soil carbon, agroforestry, rice methane) sell into the international voluntary carbon market via registries like Verra or Gold Standard. CCTS is India's own domestic scheme, administered by the Bureau of Energy Efficiency, initially built around nine designated energy-intensive industrial sectors under its compliance track.
Is agriculture included in CCTS?
Agriculture has been named among the categories proposed for CCTS's Offset Mechanism, according to the Bureau of Energy Efficiency. However, as of December 2024, the government told Parliament that no carbon credits had yet been generated under CCTS at all, across any sector — so treat agriculture's inclusion as a named future category, not a functioning pathway you can use today.
Who administers CCTS?
The Bureau of Energy Efficiency (BEE), under the Ministry of Power, administers the scheme, identifying sectors and recommending greenhouse gas emission-intensity targets. The Ministry of Environment, Forest and Climate Change is jointly involved in the scheme's development. Nine energy-intensive sectors — Aluminium, Cement, Steel, Paper, Chlor-Alkali, Fertiliser, Refinery, Petrochemical and Textile — were the initial focus of the compliance mechanism.
Is there a separate carbon market scheme specifically for Indian agriculture?
Yes, and it's easy to confuse with CCTS. The Ministry of Agriculture and Farmers' Welfare has launched its own Framework for Voluntary Carbon Market in Agriculture Sector, alongside an accreditation protocol for agroforestry nurseries, aimed at helping small and medium farmers access carbon markets. This is a distinct initiative from CCTS, run by a different ministry, and more directly relevant to most agri-carbon projects today.
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Rohan Mehta
Carbon Markets & Policy Lead
Rohan advises on methodology selection, registries, pricing and compliance — including how India’s Carbon Credit Trading Scheme (CCTS) and the EU CBAM affect agri-carbon programmes.
- Carbon markets & VVB management
- CCTS & CBAM advisory
- Offtake & price strategy