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4106 GI/202 3 (1)
EXTRAORDINARY
PART II —Section 3 —Sub-section ( ii)
PUBLISHED BY AUTHORITY
No. 2702] NEW DELHI, WEDNES DAY , JUNE 28, 2023/ASHADHA 7, 194 5
CG-DL-E-30062023-246859
MINISTRY OF POWE R
NOTIF ICATION
New Delhi, the 28th June, 2023
S.O. 2825(E).—In exercise of the powers conferred by clause (w) of section 14 of the Energy Conservation
Act, 2001 (52 of 2001) the Central Government, in consultation with the Bureau, hereby specifies the following
Scheme, namely: -
1. Short title and commencement. – (1) This Scheme may be called the Carbon Credit Trading Scheme, 2023.
(2) It shall come into force on the date of its publication in the Official Gazette.
2. Definitions. - (1) In this Scheme, unless the context otherwise requires, -
(a) “Act” means the Energy Conservation Act, 2001 (52 of 2001);
(b) “accredited carbon verification agency” means a n agency accredited by the Bureau to carry out
verification activities under the carbon credit trading scheme;
(c) “carbon credit” means a value assigned to a reduction or removal or avoidance of greenhouse gas
emissions achieved and is equivalent to one ton of carbon dioxide equivalent (tCO 2e);
(d) “carbon credit certificate” shall have the same meaning as assigned to it in clause (da) of section 2 of
the Act;
(e) “carbon credit trading scheme” shall have the same meaning as assigned to it in clause (db) of section
2 of the Act;
(f) “Commission” means the Central Electricity Regulatory Commission referred to in sub -section (1) of
section 76 o f the Electricity Act, 2003 (36 of 2003);
(g) “compliance mechanism” means a mechanism under this Scheme where the obligated entities shall
comply with the greenhouse gas emission norms as may be notified by the Central Government;
(h) “greenhouse gases” means those gaseous constituents of the atmosphere, both natural and
anthropogenic, that absorb and re -emit infrared radiation and the expression greenhouse gases include,
but not limited to, carbon dioxide (CO 2), methane (CH 4), nitrous oxide (N 2O), hydrochloro fluor ocarbons
(HCFCs), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF 6);
(i) “Indian carbon market framework” means a national framework established with an objective to
reduce or remove or avoid the greenhouse gases emissions from the Indian economy by pricing the
greenhouse gases emission through trading of the carbon credit certificates;
(j) “meta -registry” means the national greenhouse gas registry that will serve the following purposes,
namely: -
(i) data management including Market Based Mechanisms and National Inventory Management
Systems; and
(ii) transaction with features of establishing the linkages with any national or international registry of any
market -based mechanism;
(k) “non -obligated entities ” means ‘registered entities’ tha t can purchase the carbon credit certificates on
voluntary basis;
(l) “obligated entities” means ‘registered entities’ that are notified under the compliance mechanism;
(m) “power exchange” means an electronic trading platform as defined under sub -clause (as) of c lause (1)
of regulation 2 of the Central Electricity Regulatory Commission (Power Market) Regulations, 2021
published in the Gazette of India vide L -1/257/2020/CERC dated 15th February, 2021;
(n) “registered entity” shall have the same meaning as assigned to i t in clause (qa) of the section 2 of the
Act;
(o) “Registry” means the agency designated as such to perform such functions as defined in this framework
in respect of carbon credit trading scheme;
(2) The words and expressions used herein and not defined but de fined in the Act, the Environment Protection Act,
1986 (29 of 1986) and the Electricity Act, 2003 (36 of 2003) shall have the meanings respectively assigned to
them in those Acts.
3. National Steering Committee for Indian Carbon Market. -(1) The Central Gover nment shall constitute the
National Steering Committee for Indian carbon market.
(2) The governance of the Indian carbon market and direct oversight of its functioning shall vest in th e National
Steering Committee for Indian carbon market.
(3) The National Steerin g Committee for Indian carbon market shall consist of the following members, namely: -
(a) Secretary, Ministry of Power - ex-officio -Chairperson;
(b) Secretary, Ministry of Environment, For est and Climate Change – ex-officio Co-chairperson;
(c) Joint Secretary to the G overnment of India or above from the Ministry of Finance – ex-officio Member;
(d) Joint Secretary to the Government of India or above from Niti Aayog – ex-officio Member ;
(e) Joint Secreta ry to the Government of India or above from the Ministry of Power – ex-officio Member;
(f) Joint Secretary to the Government of India or above from the Ministry of Environment, Forest and
Climate Change - ex-officio Member ;
(g) Joint Secretary to the Government of India or above from the Ministry of New and Renewable Energy –
ex-officio Member;
(h) Joint Secretary to the Government of India or above from the Ministry of Steel – ex-officio Member;
(i) Joint Secretary to the Government of India or above from the Ministry of Coal – ex-officio Member;
(j) Joint Secretary to the Government of India or above from the M inistry of Chemicals and Fertilizers –
ex-officio Member;
(k) Joint Secretary to the Government of India or above from the Ministry of Petroleum and Natural Gas –
ex-officio Member;
(l) Joint Secretary to the Government of India or above from the Minist ry of Agric ulture and Farmers
Welfare – ex-officio Member;
(m) two Members – Principal Secretary from the Department of Environment of respective State
Government representing the States as nominated by the Central Government – ex-officio – Members;
(n) two expert Members – coopted by the National Steering Committee who have knowledge in the areas
of emissions, carbon trading, climate change, environment and energy – Members;
(o) Chairperson, the Central Electricity Authority – Member;
(p) Chairman and Managing Director, the Grid Co ntroller of India Limited –Member;
(q) any other Members not exceeding three as coopted by the National Steering Committee for Indian
carbon market – Member;
(r) the Director General, Bureau of Energy Efficiency – Member - Secretary;
4. Functions of Nationa l Steering Committee. -(1) The National Steering Committee shall discharge following
functions, namely: -
(a) Recommend to Bureau for the formulation and finalisation of procedures for institutionalizing the
Indian carbon market;
(b) recommend to Bureau for the f ormulation and finalisation of the rules and regulations for the functions
of Indian carbon market;
(c) recommend to Bureau for the formulation of specific greenhouse gases emission targets for the
obligated entities;
(d) recommend to Bureau for the formulation an d finalisation of guidelines regarding trading of carbon
credit certificates outside India;
(e) recommend to Bureau to issue carbon credit certificate;
(f) recommend to Bureau for the development of the process or conditions for crediting period or renewal
or expi ry of carbon credit certificate;
(g) to monitor the functions of Indian carbon market;
(h) recommend to Bureau to constitute any Committee or Working group as required in connection with
Indian carbon market; and
(i) any other functions assigned to it by the Central G overnment.
(2) The Chairperson shall call the meeting at least once in a quarter of every year.
5. Bureau as administrator and its functions. -(1) The Bureau shall be the Administrator for the Indian carbon
market.
(2) As the administrator, the Bureau shall discharge the following functions, namely: -
(a) to identify sectors and potential for reduction of greenhouse gases emissions in such sectors and
recommend to the Ministry of Power to include such sectors in Indian carbon market;
(b) to develop trajectory and t argets for the entities under compliance mechanism;
(c) to issue the carbon credits certificate based on the recommendation of the National Steering Committee
for Indian carbon market and subsequent approval of the Central Government;
(d) to develop market stabili ty mechani sm for carbon credits;
(e) to develop the procedure for accreditation and functions of accredited carbon verification agency;
(f) to accredit the agencies in accordance with the approved procedure for accredited carbon verification
agency;
(g) to determine, the fees a nd charges payable by the registered entities with the approval of Central
Government, for the purposes of meeting the cost and expense towards the implementation of this
Scheme;
(h) to develop the process or conditions for crediting period or renewa l or expir y of carbon credit
certificates;
(i) to develop data submission formats, forms for effective functioning of Indian carbon market;
(j) to undertake capacity building activities for the stakeholders;
(k) to develop and maintain the information technology infra structure including the user guidance platform
required for Indian carbon market;
(l) to maintain secure database with all security protocols as approved by the Central Government;
(m) to constitute any Committee or working group as recommended by the National St eering Com mittee
for Indian carbon market; and
(n) any other functions assigned to it by the Central Government.
6. Registry and its Functions. -(1) The Grid Controller of India Limited shall be the registry for the Indian carbon
market.
(2) The Registry shall disch arge the fo llowing functions, in the manner, as may be determined by the Central
Government from time to time : -
(a) to comply with the directions issued by the Bureau from time to time;
(b) to undertake registration of obligated or non -obligated entities;
(c) to maintain secure database with all security protocols;
(d) to maintain records of all transactions;
(e) to share the transaction records with Power Exchange and Bureau;
(f) to assist in development of information technology platform for maintaining databas e of carbon credit
certifica tes;
(g) to function as meta -registry for India;
(h) to establish linkages with other National or International registries as approved by the Central
Government; and
(i) any other functions assigned to it by the Bureau.
7. Commission as Reg ulator for trading activities under Indian Carbon Market. -(1) The Central Electricity
Regulatory Commission shall be the regulator for the trading activities under the Indian Carbon Market.
(2) The Central Electricity Regulatory Commission as a regulator to I ndian Carbon Market shall per form the
following , namely : -
(a) to regulate matters relating to trading of carbon credit certificates;
(b) to safeguard interest of both sellers and buyers;
(c) to regulate frequency of carbon credit certificates trading; and
(d) to provide market oversight and take nec essary preventive and corrective actions to prevent fraud or
mistrust.
8. Technical Committee and its Functions. -(1) The Bureau shall constitute, one or more Technical Committees
for different areas as required under compliance mechanism for the purposes of this Scheme.
(2) Each Technical Committee shall be chaired by a member who is an expert and shall possess such eligibi lity
and experience in respective sector as may be determined by the Bureau.
(3) Each Technical Committee shall consist of other members as may be required by the Bureau.
(4) Each Technical Committee shall perform functions for the purposes of this Scheme.
(5) The Tec hnical Committee shall make its recommendations to the Bureau, in respect of the matters assigned
to it.
9. Accredited Carbon Verification Agency . -(1) The Bureau with prior approval of the Central Government shall
determine the procedure including eligibili ty criteria for accreditation of any agency to function as accredited
carbon verification agency based on the recommendation of the National St eering Committee for Indian carbon
market.
(2) The Accredited carbon verification agency shall perform functions for the purposes of this Scheme as
determined by the Bureau from time to time.
10. Trading of carbon credit certificates. - (1) The Commission shal l register the power exchanges and approve the
carbon credit certificate trading in the Indian carbon market, from time to time;
(2) The power exchange shall seek approval of the Commission for their respective bylaws and rules for trading
of certificates in t he power exchange.
(3) The power exchanges shall perform functions regarding trading of carbon credit certificates, in accordance
with the regulations notified by the Commission.
11. Compliance Mechanism. -(1) The sectors and the obligated entities to be covered u nder the compliance
mechanism shall be decided by the Ministry of Power based on recommend ations of the Bureau;
(2) The Bureau shall undertake studies for the sectors or obligated entities as decided in sub -paragraph (1)
for recommending the targets in terms of ton of carbon dioxide equivalent (tCO 2e) per unit of equivalent
product after taking in to account all relevant aspects including available technologies and likely cost of
their implementation;
(3) The Ministry of Power, after duly considering the recommenda tions of Bureau and National Steering
Committee for Indian carbon market, shall recommend the notification of greenhouse gases emission
intensity targets to the Ministry of Environment, Forest and Climate Change for notification under the
Environment Prote ction Act, 1986;
(4) The obligated entities shall be required to achieve greenhouse gases emi ssion intensity in accordance
with the targets as may be notified by the Ministry of Environment, Forest and Climate Change;
(5) The obligated entities shall also be requ ired to meet any other targets such as use of non -fossil energy
consumption or specific en ergy consumption as may be notified by the Ministry of Power under the Act
as amended from time to time;
(6) The obligated entities shall be issued carbon credit certific ates for their achievement in reducing the
greenhouse gases emission intensity exceeding t he target set for such obligated entities, based on the
recommendation of National Steering Committee for Indian carbon market;
(7) The obligated entities who did not ac hieve their targeted reduction in greenhouse gases emission
intensity shall meet shortfall by purchasing carbon credits certificates from Indian carbon market;
12. Detailed procedure. -(1)The National Steering Committee for Indian carbon market and other autho rities shall
develop the detailed procedure for operationalising the Indian carbon market, in accordance with this Scheme.
(2) The detailed procedure shall contain the following, namely: -
(i) criteria for issuance of carbon credit certificates ;
(ii) validity of carbon credit certificates;
(iii) floor and forbearance price of carbon credit certificates;
(iv) requirement, format and timeline for submissions;
(v) monitoring, reporting and verification; and
(vi) any other related and incidental matters.
13. Power to issue direct ions. -The Bureau may, from time to time, issue such directions and orders to the registered
entities, with the approval of the Central Government, as considered appropriate for the implementation of this
Scheme.
[F. No. 21/6/2022 -EC]
AJAY TEWARI , Addl. Secy.
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