The Bureau of Energy Efficiency (BEE) has released Version 1 of the Offset Mechanism under India’s Carbon Credit Trading Scheme (CCTS), marking a pivotal step in establishing a transparent and credible carbon market in India. This carbon offset framework ensures that carbon credits issued are real, measurable, and aligned with global sustainability goals, reinforcing India’s commitment to a robust carbon credit trading system.
To curb GHG emissions in India, the Energy Conservation Act, 2001, was amended in 2022, empowering the Central Government to establish the Indian Carbon Market through the Carbon Credit Trading Scheme (CCTS). The scheme was notified in June 2023, introducing the Compliance Mechanism, and later amended in December 2023 to include the Offset Mechanism. The Bureau of Energy Efficiency (BEE) administers the CCTS, overseeing the issuance of Carbon Credit Certificates. In March 2025, BEE released Version 1 of the Detailed Procedure for the Offset Mechanism. It includes methodologies for Phase 1 sectors: energy, industry, waste handling and disposal, agriculture, forestry, and transport. Methodologies for Phase 2 sectors—construction, fugitive emissions, solvent use, and CCUS, will be addressed at a later stage.
The document serves as a comprehensive guide to the Offset Mechanism, ensuring clarity and consistency for stakeholders in carbon offset projects.
It has the following five sections:
A: Registration and Issuance Procedure Section
This section describes the administrative steps for account registration, project registration, validation, verification, and the issuance of carbon credit certificates (CCCs).
- The project involves the following steps:
- Upon successful verification, the ACVA shall recommend the project for issuance of CCCs to the Administrator, which then reviews the verification report and issuance request. Following a successful review, the Administrator issues CCCs to the non-obligated entity upon National Steering Committee for Indian Carbon Market’s (NSC-ICM) recommendation.
- Requests for issuance must be submitted in a chronological order and within two years after the end of the crediting period.
- Renewal of the crediting period can be applied for along with a request for issuance or separately, and it requires validation by the ACVA.
- Issued carbon credits can have a status of active, retired, or canceled.
Retirement of carbon credits is the permanent removal of CCCs from circulation.
B: Project Standard Section
This section outlines the criteria for non-obligated entities in the design and implementation of project activities and the issuance of CCCs.
- It establishes eligibility criteria and guidelines, requiring projects to comply with all relevant regulations, including CSR laws if applicable.
- Projects must have a start date no earlier than January 1, 2025, maintain exclusivity (except under the Green Credit Programme),
- It outlines the methodology, defined boundaries, baseline scenario, estimated emission reductions, monitoring plan, and alignment with relevant SDGs. Credit periods may be either fixed or renewable, with reassessment required for renewal. Continuous monitoring and reporting are mandatory, along with validation to ensure ongoing eligibility.
C: Validation and Verification Standard Section
This section provides the minimum requirements for Accredited Carbon Verification Agencies (ACVAs) when validating a proposed or registered ICM project activity, including post-registration changes, renewals, and verification of GHG emission reductions or removals.
- It outlines the principles that ACVAs must adhere to, including impartiality, an evidence-based approach, fair presentation, and documentation.
- The section also details the general validation and verification requirements, specifying that ACVAs must have a competent team, follow the standard and guidance provided, and determine if project activities meet requirements.
- It provides a structured process for validation, including a completeness check, desk review, on-site assessment, and resolution of corrective action requests (CARs), forward action requests (FARs), and clarification requests (CLs).
- The standard also covers stakeholder consultation, validation conclusions, and the contents of the validation report.
D: Sustainable Development Goal (SDG) Standard Section
This section provides a structured framework to help non-obligated entities manage environmental and social risks while aligning their activities with the UN Sustainable Development Goals (SDGs).
- This section outlines a step-by-step approach for non-obligated entities to identify, evaluate, mitigate, and monitor potential negative environmental and social risks and potential positive contributions to the 17 United Nations Sustainable Development Goals (SDGs).
E: Methodology Development and Adoption Procedure
This section defines the processes for developing new methodologies and methodological tools, revising approved methodologies, and providing clarifications on approved methodologies and tools.
- It specifies that the procedure applies to both bottom-up and top-down cases for developing new methodologies, as well as methodologies and methodological tools adopted from CDM (Clean Development Mechanism), Article 6.4, or other credible global voluntary carbon standards.
- Its guiding principles are based on ISO 14064 Part 2 (2019) specifications.
- It details the methodology development process, including the steps for methodology concept note submission, draft methodology preparation, methodology review by the Technical Committee for Offset Mechanism, public comments, and publication of the methodology on the ICM web-portal.
India’s Offset Mechanism aligns the country with global efforts to reduce carbon emissions while setting a strong example for sustainability. MSMEs, corporates, and sustainability leaders alike should understand and leverage this mechanism to decarbonize operations, generate carbon credits, and lead the net-zero transition.
Explore our deep dive on India’s carbon market here.