CCTS compliance for obligated entities

India's Carbon Credit Trading Scheme, 2023 (CCTS) creates a domestic carbon market. Under its compliance mechanism, the Ministry of Environment, Forest and Climate Change notifies greenhouse gas emission intensity (GEI) targets for obligated entities, in tonnes of CO₂ equivalent per unit of product (for refineries, per thousand barrels of crude processed), with 2023-24 as the base year and targets for 2025-26 and 2026-27.

Targets were notified in October 2025 for aluminium, cement, chlor-alkali and pulp and paper, and in January 2026 for petroleum refineries, petrochemicals, textiles and secondary aluminium. Draft targets for iron and steel were published in June 2026.

Many obligated entities will recognise the approach from the Perform, Achieve and Trade (PAT) scheme, which also set plant-level targets. VPA India helps obligated entities measure, verify and plan their compliance, so that each compliance year closes without surprises.

How compliance works

Each compliance year, an obligated entity monitors its emissions and production under a monitoring plan, has its GHG emission report verified by an accredited carbon verification agency (ACVA) and submits it to the Bureau of Energy Efficiency (BEE).

If your emission intensity is below the target, you are issued carbon credit certificates (CCUs) for the difference, which you can bank for later years or sell.
If it is above the target, you must surrender CCUs to cover the shortfall, buying them on the power exchanges if you do not hold enough. A shortfall that is not covered can attract environmental compensation imposed by the Central Pollution Control Board.

Verification is carried out to a reasonable level of assurance, so your data and records must be complete and traceable. The procedure also sets deadlines for the monitoring plan at the start of each compliance year and for the verified emission report after it ends; we build these into your compliance calendar.

What we do

Applicability and target review. Confirm how the rules apply to each of your units, and check your notified target against your baseline data.
Monitoring plan. Prepare the plan BEE requires: boundaries, emission sources, calculation methods and data controls.
Emissions and production data. Set up the measurement and calculation of emission intensity, covering fuels, process emissions and purchased electricity, including the sampling and laboratory analysis that the procedure calls for.
Verification readiness. Prepare the evidence file and support you through verification by your ACVA.
Registry and trading accounts. Support account set-up on the Indian Carbon Market registry and the power exchanges.
Compliance strategy. Compare the cost of reduction measures with buying CCUs, and plan banking and trading across compliance years, so that certificate purchases or sales are timed with your production plans.
Reduction projects. Identify and assess energy-efficiency, fuel-switching, renewable-energy and process measures that lower your emission intensity.

Where to start

Start by checking your notified target against your own 2023-24 baseline data and the monitoring plan your units will need. Gaps found early are easier to close than gaps found during verification.

What you receive

An applicability and target review note
A monitoring plan and data procedures
An annual emission-intensity calculation and a draft GHG emission report
A verification evidence file
A compliance and trading strategy with a reduction roadmap

Who we work with

Obligated entities in the notified sectors; groups with several notified units that want one consistent approach; and units in sectors with draft targets that want to be ready before their targets are notified.

Frequently asked questions

Who is an obligated entity?

An entity registered under the CCTS for which the government has notified a GEI target. The targets notified in October 2025 and January 2026 cover units in aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles.

What are carbon credit certificates (CCUs)?

They are the tradable units of India's carbon market; under the scheme, one carbon credit equals one tonne of carbon dioxide equivalent. BEE issues them to obligated entities that beat their targets, and entities that miss their targets surrender them to cover the shortfall. They are traded on power exchanges registered with the Central Electricity Regulatory Commission.

How does the compliance mechanism differ from the offset mechanism?

The compliance mechanism sets mandatory emission intensity targets for obligated entities. The offset mechanism is the voluntary side of the scheme, for emission-reduction and removal projects. Our services for offset projects are on Carbon Credits & Offsets.