India’s first compliance carbon market begins trading this October. Here is how the Carbon Credit Trading Scheme (CCTS) will work — and who has to play.

**Who is in.** Around 490-740 obligated entities across nine sectors — including aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles — must meet facility-specific emission intensity (GEI) targets. Targets are set against an FY23-24 baseline: 1-3% cuts for FY25-26, tightening to 2-8% for FY26-27. Iron, steel and fertiliser targets are still pending.

**How it works.** Beat your target and you earn Carbon Credit Certificates (CCCs), bankable for future use. Miss it and you must buy CCCs from the market — or pay twice the average market price plus statutory penalties of up to Rs 10 lakh. Trading happens on the IEX, PXIL and HPX power exchanges, with no over-the-counter deals at launch. A GRID-INDIA registry tracks credits, under CERC oversight. Early estimates put CCCs at Rs 600-900 per tonne.

**Why it matters.** The scheme replaces the PAT efficiency programme and turns emissions into a tradeable asset. Form A compliance filings were due July 31, 2026 — the first trades will show whether India can price carbon at scale.