BEE Sets Monthly Trading Schedule for Carbon Credit Certificates

The Bureau of Energy Efficiency (BEE) has issued a detailed procedure for the registration, trading, transfer and settlement of Carbon Credit Certificates (CCCs) under India's compliance mechanism, establishing a fixed monthly trading schedule and outlining the responsibilities of obligated entities, voluntary purchasers, power exchanges and the registry.

The procedure, issued in October 2026 under the Central Electricity Regulatory Commission (CERC) (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026, provides the operational framework for transactions through the Indian Carbon Market (ICM).

Under the prescribed schedule, CCC trading will take place on the last Thursday of every month. If the scheduled day falls on a public or bank holiday, trading will be conducted on the next working day. BEE, in consultation with power exchanges, will publish the annual holiday calendar on its website and the ICM Portal by December 31 of the preceding year.

The procedure specifies that the Registry will freeze the CCC inventory of all obligated entities on the ICM Portal by 11:00 hours on the trading day. The bidding window across designated power exchanges will remain open for two hours from 12:00 hours to 14:00 hours.

Power exchanges must submit details of the buy and sell bids to the Registry by 14:30 hours for verification. The Registry will cross-check the cumulative sell bids placed by each obligated entity across all exchanges against the available CCC balance by 15:00 hours.

Where cumulative sell bids exceed the available certificates, the entity will be treated as a defaulter, and its bids will be excluded from price discovery for that trading session.

Following verification, power exchanges will discover the Market Clearing Price (MCP) and Market Clearing Volume (MCV) by 16:00 hours through a closed, double-sided uniform-price auction. The exchanges will submit transaction confirmation reports to the Registry by 16:15 hours, while the Registry must update the respective accounts and issue transaction approval acknowledgements by 16:45 hours. The CCC inventory will subsequently be unfrozen.

Power exchanges will also submit their Management Information System (MIS) reports by 10:00 hours on the next working day.

Registration and eligibility

The procedure provides for automatic registration of obligated entities and non-obligated entities intending to purchase CCCs on a voluntary basis. Entities already registered with the Administrator on the ICM Portal will be registered with the ICM Registry without a separate application.

The ICM Portal will transmit registration details to the Registry through an application programming interface (API)-based mechanism. Following replication of the information, the Registry will issue electronic Certificates of Registration and share the list of registered entities with the Administrator and power exchanges.

Eligible participants include obligated entities that have received CCCs and intend to sell them, entities that have failed to meet their greenhouse gas emission intensity (GEI) targets and need to purchase certificates, and entities seeking to purchase CCCs for subsequent compliance years. Non-obligated entities may also participate as voluntary purchasers.

Obligated entities receiving CCCs must pay the applicable crediting fee for the certificates to be credited to their Registry accounts. The procedure also provides for fees and charges to be collected in accordance with CERC's applicable fee order, along with GST.

Restrictions on resale and banking

The procedure imposes restrictions on the resale and transfer of purchased CCCs. Certificates acquired through the compliance market cannot be resold under any circumstances.

CCCs purchased by obligated entities in excess of their compliance requirements may be banked for use against GEI targets in subsequent compliance years. However, such banked certificates cannot be resold.

For non-obligated entities purchasing CCCs voluntarily, the certificates must be used solely for retirement and cannot be resold or banked.

The procedure also prohibits bilateral trading within the same corporate group and inter-sector self-retention or transfer of CCCs.

Transactions will follow the First-In-First-Out (FIFO) principle. CCCs issued to obligated entities may be banked or sold until their validity expires, subject to the applicable provisions of the Detailed Procedure for Compliance Mechanism.

Penalties and default provisions

The procedure establishes consequences for entities that breach trading requirements. If an obligated entity records more than three defaults under the specified provisions of the CERC regulations in a quarter, it will be barred from dealing in CCCs for the next six months. The restriction will apply in addition to any penalties under the Energy Conservation Act, 2001, and will not affect the applicability of penalties under the Environment (Protection) Act, 1986.

The Registry will publish the list of such defaulting entities monthly.

Registration may also be revoked if an entity fails to meet its obligations, pay applicable fees or comply with the regulations and directions issued by CERC or the Administrator. Entities will be given seven working days to rectify defaults identified in a notice. If the default remains unresolved, the Registry will seek the Commission's permission to proceed with revocation. A notice of at least 14 working days and an opportunity to present its case must be provided before registration is revoked.

The procedure further clarifies that CCCs already credited or exchanged will remain valid under the Carbon Credit Trading Scheme (CCTS) even if an entity's registration is revoked. However, those certificates will not be available for transactions on power exchanges during the revocation period.

The three-part procedure also defines the responsibilities of BEE as Administrator, Grid Controller of India Limited as Registry, and the power exchanges in maintaining registration records, transaction accounts, electronic records and information-sharing systems for the compliance carbon market.