India's power ministry has released a draft carbon credit trading scheme and is seeking views from stakeholders by 14 April, as part of its process to establish a carbon credit market in the country.
The Energy Conservation (Amendment) Bill was passed in December empowering the central government to establish carbon credit trading markets in India.
The draft scheme proposes a structure for the Indian carbon credit market, for both voluntary trading and compliance, which will be administered by a governing board comprising of secretaries and joint secretaries of the environment, power, renewable energy, steel, coal and oil ministries.
The proposed board will recommend procedures and rules for the market and frame the methodologies for voluntary carbon credit trading, as well as guidelines regarding the sale of carbon credit certificates to overseas buyers, according to the draft.
One of the provisions of the amendment bill empowers the central government to specify a carbon trading scheme in consultation with the Bureau of Energy Efficiency, an agency under the power ministry. The bureau will help to accredit an agency that will carry out validation or verification activities with respect to the carbon credit trading scheme.
A carbon credit certificate, on the other hand, will be issued by the government to a registered entity or any authorised agency. Each certificate shall represent a reduction or removal of 1t of CO2 equivalent.
Under the draft framework, the ministry also proposes setting up an Indian Carbon Market Governing Board (ICMGB) headed by power and environment secretaries who will be responsible for direct oversight of administrative and regulatory functions.
India plans to cut carbon emissions by 1bn t by 2030 from 2005 levels. The government is also aiming to increase the share of renewable power generation capacity to 500GW by 2030, by when it also hopes to meet 50pc of its energy requirements from renewables.
The Indian Energy Exchange last year set up the International Carbon Exchange to enable market participants to buy and sell voluntary carbon credits at competitive prices through the platform.
