CERC Notifies Rules for Carbon Credit Certificates Trading Under CCTS
The Central Electricity Regulatory Commission has notified the 2026 regulations governing the trading of Carbon Credit Certificates, establishing a formal market framework under India’s Carbon Credit Trading Scheme 2023.
May 05, 2026. By Mrinmoy Dey
The regulations aim to create a structured and transparent market mechanism for trading carbon credits between obligated and non-obligated entities.
Under the new framework, CCCs will be traded primarily through recognised power exchanges, with provisions for other modes subject to regulatory approval. The market will be divided into two segments – a compliance market for obligated entities and an offset market for non-obligated entities – ensuring targeted participation based on regulatory obligations.
The Bureau of Energy Efficiency has been designated as the administrator responsible for overseeing the mechanism, including developing procedures for transactions, facilitating stakeholder coordination, and ensuring transparency in trading activities. Meanwhile, the Grid Controller of India will function as the registry, maintaining records of issuance, transfer, and holding of carbon credit certificates.
Each carbon credit certificate will represent one tonne of carbon dioxide equivalent (tCO₂e) reduced, avoided, or removed. Pricing of CCCs will be market-driven through power exchanges, but within a regulatory band defined by floor and forbearance prices approved by the Commission to prevent excessive volatility.
The regulations mandate that all participating entities must register and can only trade credits equivalent to their holdings in the registry, with strict penalties for non-compliance. Entities found defaulting repeatedly may face suspension from trading for up to six months, reinforcing market discipline.
Further, the framework includes provisions for monthly trading cycles, registry reconciliation, transaction reporting, and market oversight. The Commission, supported by the Bureau, will monitor market behaviour and can intervene in cases of abnormal price fluctuations or irregular trading patterns.
With this move, India is effectively transitioning from policy intent to market implementation in carbon trading. The regulations are expected to support emissions reduction efforts, incentivise low-carbon technologies, and provide a market-based mechanism for achieving climate targets, while integrating Indian industry into emerging global carbon compliance regimes.
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