India’s Ministry of Environment, Forests and Climate Change (MoEFCC) on February 17, 2023 finalized and announced list of activities to be considered for trading of carbon credits under bilateral and cooperative approaches under Article 6.2 of Paris Agreement Rule Book. The Paris Rulebook was adopted at COP 24, the United Nations climate conference at Katowice, Poland in December 2018, laying down timetable in which each country is expected to submit updated national plans, every five years, for limited emissions and adapting to the impacts of climate change, commonly known as ‘nationally determined contributions (NDCs).
The list of activities announced by MoEFCC for trading in carbon credits on global platforms are:
Green House Gas (GHG) Mitigation Activities:
- Renewable Energy with Storage (only stored components)
- Solar Thermal Power
- Off-shore wind
- Green Hydrogen
- Compressed bio-gas
- Emerging mobility solutions like fuel cells
- High-end technology for energy efficiency
- Sustainable aviation fuel
- Best available technology for process improvement in hard to abate sectors
- Tidal Energy, Ocean Thermal Energy, Ocean Salt Gradient Energy and Ocean Current Energy
- High Voltage Direct Current Transmission in conjunction with renewable energy projects.
- Green Ammonia
- Carbon Capture Utilization and Storage
The finalization of the list of activities means that any entity can now earn and accumulate credits through these cleaner activities and those credits can be traded on a global platform. These activities will facilitate adoption and transfer of emerging technologies and may be used for mobilize international finance in India and the activities will be initially for the first three years and thereafter update and/or revised by the National Designated Authority for Implementation of Paris Agreement (NDAIAPA).
In May 2022, India notified setting up of the NDAIAPA to decide on types of projects that may take part in international carbon market under the Article 6 of the Paris Rulebook.
The finalization of the list of activities by MoEFCC also paves the way for the inter-ministerial group comprising latter and ministry of power to issue official notification on complete framework for a domestic carbon trading platform and administered by Bureau of Energy Efficiency (BEE), a statutory body under ministry of power.
“The framework is expected to be released this year and domestic voluntary carbon trading too can commence this year,” BEE, Director General Abhay Bakre said.
“The framework will be formulated complete with set of systems, methodologies of voluntary market for these sectors,” he said.
It might be noted that last year, BEE published “National Carbon Market: a draft blueprint for stakeholders consultation” elaborating present infrastructure, how carbon markets operate and examining projected view of an independent national carbon market.
Last month, the Indian Energy Exchange (IEE), an electronic system-based power trading platform regulated by federal government’s Central Electricity Regulatory Commission (CERC), announced setting up of a wholly owned subsidiary, International Carbon Exchange Private Limited to explore business opportunities in voluntary carbon market.
On December 26, 2022, the Indian government issued official notification giving effect to Energy Conservation Amendment Act 2022. This provided the legal empowerment to the central government to specify a carbon credit trading scheme along with implementation of other measures for efficient use of energy India’s obligations Committee of Parties-26 (COP26) in Glasgow in 2021.
PIB Press release: https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1900216
“National Carbon Market: a draft blueprint for stakeholders consultation”:
India introduces concept of carbon credit trading in Energy Conservation Act (2023/01/26)
NITI Aayog releases Study on CCUS Policy Framework and Deployment Mechanism (2023/01/11)