1. What is the Carbon Credit Trading Scheme (CCTS)?
The CCTS is a strategic initiative by India's Power Ministry, in collaboration with the Bureau of Energy Efficiency (BEE), designed to encourage the reduction, removal, or avoidance of greenhouse gas emissions. It facilitates the trading of Carbon Credit Certificates (CCCs), where each certificate represents a tonne of CO2 equivalent reduced, removed, or avoided from the atmosphere.
2. What distinguishes the compliance mechanism from the offset mechanism within the CCTS?
● Compliance Mechanism: Targets obligated entities under legal obligation to reduce emissions. These entities are allocated a certain number of credits reflecting their permissible emission levels, which can be traded to maintain compliance.
●Offset Mechanism: Open to non-obligated entities that aim to voluntarily reduce their carbon footprint. These entities can register projects that contribute to GHG reduction and earn tradable CCCs.
3. Who is eligible to participate in the CCTS?
The scheme encompasses both obligated entities, which have legal mandates to cut down emissions, and non-obligated entities looking to voluntarily contribute to emission reduction for ethical, social, or business reasons, including meeting internal climate goals or public commitments.
4. How are CCCs issued within the CCTS?
CCCs are issued following a thorough evaluation by a BEE-accredited agency of projects that successfully demonstrate quantifiable GHG reduction, removal, or avoidance.
5. Is it possible for non-obligated entities to generate and trade CCCs?
Yes, the amended CCTS enables non-obligated entities to engage in the voluntary carbon market by registering projects that lead to GHG reduction. Upon verification, these projects can earn CCCs, which the entities can then trade.
6. How does CCC trading support hard-to-abate sectors?
CCC trading provides a mechanism for sectors with inherently high GHG emissions, like cement and steel production, to invest in offsets or innovative reduction technologies indirectly. This flexibility helps mitigate the challenges of direct emission reductions in these sectors.
7. Can CCC trading be linked with other environmental credits?
The possibility of integrating CCC trading with energy saving certificates (ESCerts) and renewable energy certificates (RECs) has been considered. Such integration would allow for broader trading options and support the fungibility of different environmental credits, enhancing the scheme's flexibility and impact.
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