India Plans to Launch First Comprehensive Carbon Trading Programme

India is finalising a compliance carbon market that will record emissions from participating industries for the period April 2025 – March 2026. The Bureau of Energy Efficiency has issued targets for about 490 units across seven sectors through notifications released in October 2025 and January 2026. 

Key Features of the Compliance Scheme 

The scheme has a mandatory compliance component for 800 units in nine sectors and a voluntary offset component. Credits will be issued separately for each component and traded on a dedicated platform. 

Timeline for Target Setting and Verification 

The first cycle of FY 26 targets ends on March 31, 2026, followed by a 4‑month verification period and a 3‑month assessment phase. Credits are slated for issuance in October 2026, with trading expected between November 2026 and January 2027. The government aims to have the registration portal operational by March 20, 2026. 

Sector Coverage and Pending Inclusions 

Current notifications cover 281 units in aluminium, cement, chlor‑alkali and pulp & paper, and 208 units in secondary aluminium, petroleum refineries, petrochemicals and textile. Steel and fertiliser sectors, although mentioned, have not yet received emission targets. The power sector is excluded from the first phase. 

Read More: SBI Targets 10% Green Advances By 2030, Launches CHAKRA To Boost Sunrise Sectors! 

Pricing Framework and Market Comparison 

Targets were set to keep carbon costs around $10 per tonne of carbon dioxide, contrasting with the European Trading Scheme price of over $75 per tonne and Chinese market prices of roughly $10 per tonne. The price level is intended to balance cost pressures on industry with incentives for emission reductions. 

Conclusion 

The forthcoming carbon‑trading programme establishes a structured compliance mechanism for a defined set of industrial units, introduces a transparent credit market and aligns India’s domestic policy with international carbon pricing trends. 

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