India's Carbon Credit Trading Scheme (CCTS) began transitioning nine industrial sectors from the PAT scheme in FY2026. The sectors include aluminium, chlor-alkali, cement, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery, and textile, accounting for approximately 16% of India's total emissions. Draft GHG emission intensity targets were released for four sectors in April 2025 and five more in June 2025, covering over 740 industrial entities. The Indian Carbon Market is expected to be officially launched by mid-2026. In January 2026, final targets for refinery, petrochemicals, and textiles were notified.
India's Carbon Credit Trading Scheme: Nine Sectors Begin Transition
AQuick answer
India's CCTS began transitioning 9 industrial sectors in FY2026, covering 16% of total emissions; carbon market launch expected mid-2026.
Key facts
- India's Carbon Credit Trading Scheme (CCTS) began transitioning nine industrial sectors from the PAT scheme in FY2026
- The nine sectors — aluminium, chlor-alkali, cement, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery, and textile — account for approximately 16% of India's total emissions
- Over 740 industrial entities are covered under the scheme
- Draft GHG emission intensity targets released for four sectors in April 2025 and five more in June 2025
- The Indian Carbon Market is expected to be officially launched by mid-2026
Mains angle
Q: Examine how India's Carbon Credit Trading Scheme transitions nine sectors from PAT and its implications for a planned carbon market launch by mid-2026.
Answer (50 words):
India's CCTS began transitioning nine sectors — aluminium, chlor-alkali, cement, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery, and textile — from PAT in FY2026, covering approximately 16% of total emissions across over 740 industrial entities. The Indian Carbon Market is expected to officially launch by mid-2026.
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Linked questionMedium
At COP30 in Belem, by how much did India reduce its GDP emission intensity between 2005 and 2020?
Explanation · Correct answer B
India stated at COP30 that it reduced GDP emission intensity by 36% between 2005 and 2020.
Source: ICAP
Frequently asked questions
Which nine sectors are transitioning to India's Carbon Credit Trading Scheme (CCTS)?
The nine sectors transitioning to India's **Carbon Credit Trading Scheme (CCTS)** are: **aluminium, chlor-alkali, cement, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery, and textile**. Together they account for approximately 16% of India's total emissions.
What was India's PAT scheme and how does CCTS differ from it?
India's **Perform Achieve and Trade (PAT) scheme** was an energy efficiency programme that CCTS is replacing from FY2026. The **Carbon Credit Trading Scheme (CCTS)** is a more comprehensive market-based mechanism where industries trade **carbon credits (ICMUs)** based on greenhouse gas emission intensity targets.
What is the Indian Carbon Market (ICM) and when was it established?
The **Indian Carbon Market (ICM)** was established under the **Energy Conservation (Amendment) Act, 2022** to create a domestic carbon trading mechanism. The market operates through the **Indian Carbon Market Incubator (ICMI)** and issues tradeable instruments called Indian Carbon Market Units (**ICMUs**).
How many industrial entities are covered under India's Carbon Credit Trading Scheme?
India's CCTS covers over **740 industrial entities** across nine sectors. Draft GHG emission intensity targets were released for four sectors in April 2025 and five more in June 2025, transitioning them from the PAT scheme in FY2026.
What percentage of India's emissions do the nine CCTS sectors account for?
The nine sectors covered under India's **Carbon Credit Trading Scheme (CCTS)** — including cement, steel, aluminium, fertiliser, and textile — account for approximately **16% of India's total greenhouse gas emissions**.
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