Unlocking a Greener Future: Ministry of Environment Launches 2023 Carbon Credit Trading Scheme to Boost Industrial Emission Standards

On October 8, 2025, India took a significant step in its climate efforts by launching the Carbon Credit Trading Scheme, 2023. This move was announced in The Gazette of India and focuses on cutting down greenhouse gas emissions in important industries.

The scheme allows industries to earn Carbon Credit Certificates if they meet specific performance criteria, set under the Energy Conservation Act, 2001. By doing this, the government creates a system that rewards compliance and penalizes those who don’t act. This aims to foster accountability and transparency in achieving India’s long-term emissions goals and promoting cleaner industrial practices.

The notification details which industries must comply. Notably, the Paper and Pulp Sector is a major focus, given its high energy usage and emissions. Companies like Ruchira Papers Ltd., ITC Limited’s Paperboards and Specialty Papers Division, and Pudumjee Paper Products Ltd. are among those required to adhere to the new rules. This emphasizes the importance of reducing emissions in sectors that have traditionally been energy-intensive.

Each company has specific emission intensity targets, calculated using a clear methodology. This approach ensures that the goals are understandable and tailored to each company’s size and output. Instead of broad limits, the scheme sets precise, achievable targets grounded in science.

Since compliance is mandatory, industries must stick to their assigned targets or face consequences. This change makes emission reduction a legal requirement rather than a voluntary effort. Companies that meet their targets can earn Carbon Credit Certificates, which can be traded within the national carbon market, potentially offering financial rewards.

The government aims to inspire industries to adopt cleaner practices and improve energy efficiency. This aligns with India’s commitments under global climate agreements like the Paris Accord. The scheme encourages companies to innovate and invest in low-carbon technologies while contributing to national sustainability goals. In fact, experts believe that carbon trading mechanisms can significantly reduce emissions if properly implemented. A recent report from the World Resources Institute found that market-based systems could lead to a 15-20% reduction in emissions by 2030.

With this notification, India’s Carbon Credit Trading Scheme moves from planning to action. This initiative sets clear targets and procedures, pushing industries to take on a more active role in combating climate change. It marks a crucial shift in India’s environmental strategies, aiming for a cleaner and more sustainable industrial future.

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