The first two articles in this loose trilogy looked at sides of the same problem from ground level. Nature Versus Nurture: India's Fertiliser-Fed Food Security diagnosed how decades of urea-heavy fertiliser policy have been quietly costing India its soil fertility. Bio-Fertiliser and Green Credits: Regrowing India's Arid Land covered the policy response taking shape around that diagnosis — GOBARdhan bio-fertiliser plants, the Green Credit Programme's tree-plantation mechanism, and, in a short closing section, a first look at whether Compressed Bio-Gas (CBG) projects could also earn carbon credits under the Bureau of Energy Efficiency's Carbon Credit Trading Scheme (CCTS).

That closing section left a gap open on purpose. The CBG-CCTS link was evidenced only by an unretrieved GOBARdhan circular reference — worth flagging, not worth asserting as settled. This article closes that gap with a primary source, and then steps back to look at the market mechanism as a whole: India now has two distinct, parallel systems for pricing and trading emissions reductions. One is domestic — the Carbon Credit Trading Scheme and the Indian Carbon Market (ICM) it operates. The other is international — the Article 6.2 bilateral mechanism under the Paris Agreement, through which India acts as a Host Party enabling other countries to fund and credit projects on its soil. Both are live, both are expanding, and — as far as the sources gathered for this piece show — they are not the same market.

Part 1 — The Domestic Market: CCTS and the Indian Carbon Market

The Carbon Credit Trading Scheme was notified by the Government of India in 2023 (S.O. 2825(E), 28 June 2023) under clause (w) of Section 14, read with Section 14AA, of the Energy Conservation Act, 2001 (as amended in 2022). It provides the overall legal framework for the Indian Carbon Market. Its stated objective, per the Ministry of Environment, Forest and Climate Change (MoEFCC), is to reduce or avoid greenhouse gas emissions across sectors of the Indian economy "by pricing the emissions through a carbon credit certificate trading mechanism."

CCTS operates through two mechanisms, only one of which the sources gathered here describe in any detail:

• Compliance Mechanism — emission-intensive industries designated as Obligated Entities must meet assigned Greenhouse Gas Emission Intensity (GEI) targets. Entities that outperform their targets earn tradeable Carbon Credit Certificates (CCCs), which they can sell to entities that miss their targets.
• Offset Mechanism — named in the January 2026 PIB release as the second pillar of CCTS, but not detailed in any of the sources gathered for this article. Not established here: eligibility criteria, project types, or how it interacts with the Compliance Mechanism.

The Compliance Mechanism's rollout has happened in two notified batches so far, taking the obligated-entity count from zero to 490 in barely three months (8 Oct 2025 to 13 Jan 2026):

The underlying rules — the Greenhouse Gases Emission Intensity Target Rules, 2025, first published in draft form (G.S.R. 234(अ), 16 April 2025) and finalised as G.S.R. 739(E) on 8 October 2025 — set the mechanics for both batches. Obligated entities are benchmarked against a 2023-24 baseline GEI (tCO2e per unit of equivalent product) and must hit reduction targets for compliance years 2025-26 and 2026-27. An entity that falls short must purchase Carbon Credit Certificates from the ICM to cover the shortfall; an entity that beats its target earns certificates it can sell. Non-compliance triggers an "environmental compensation" penalty set at twice the average CCC trading price for that year's trading cycle, payable within 90 days to the Central Pollution Control Board (CPCB), with proceeds directed into a dedicated CCTS fund on the recommendation of a National Steering Committee.

Part 2 — What the Company-Level Numbers Actually Show

Beneath the sector-level announcements, the GEI Target Rules carry plant-by-plant Schedule tables naming individual facilities, their registration IDs, and their baseline and target GEI figures. A representative sample from the Aluminium and Cement sectors, drawn from the notified rules:

The structural point worth pulling out of that table: within the Aluminium sector alone, the baseline GEI for Smelter sub-sector plants (roughly 13.9-19.2 tCO2e per tonne of product in the sample above) runs somewhere on the order of 12-35x higher than the baseline for Refinery sub-sector plants (roughly 0.5-1.2 tCO2e per tonne), depending on which specific plants are compared. That's a real structural fact about where emissions concentrate within a single sector — the electrolytic smelting step, not the alumina refining step, is where nearly all of the aluminium industry's carbon intensity actually sits. A sector-wide "Aluminium" reduction target of 5.8% (per the legal/ESG summary of the final rules) is doing very different work at a smelter than at a refinery.

A genuinely notable finding: the numbers moved between draft and final

Comparing the same plants across the draft rules (published 16 April 2025 for public comment, G.S.R. 234(अ)) and the final notified rules (8 October 2025, G.S.R. 739(E)) turns up something worth flagging plainly: the baseline and target GEI figures were not simply carried over unchanged from draft to final. For Vedanta Ltd's Jharsuguda Smelter II (registration ALMOE001OD), the draft listed a 2023-24 baseline GEI of 13.4927 tCO2e/tonne with a proposed 2025-26 target of 13.2260 tCO2e/tonne. The final notification lists a baseline of 13.8878 tCO2e/tonne and a final 2025-26 target of 13.7232 tCO2e/tonne for the same plant — both figures materially higher than what went out for public comment, meaning both the starting line and the finish line moved. Cement tells a more precise, different story: for J K Cement's Mudhol facility (CMTOE001KA), the baseline GEI was identical in both draft and final (0.4455 tCO2e/tonne) — it was only the target that loosened, from a draft 2025-26 figure of 0.4417 to a final figure of 0.4440. The same pattern holds for Dalmia Cement's Belgaum facility (CMTOE002KA): baseline unchanged at 0.4894, but the 2025-26 target eased from a draft 0.4852 to a final 0.4878. In other words, the Aluminium-sector example shows a genuine re-baselining (the reference point itself moved), while the Cement-sector examples show something narrower — the same starting point, but a marginally softer target.

Part 3 — The International Track: Article 6.2 and India as a Host Country

Separately from CCTS, India also operates on the international side of carbon markets under Article 6 of the Paris Agreement. India notified the National Designated Authority for the Implementation of the Paris Agreement (NDAIAPA) via Gazette Notification dated 30 May 2022. NDAIAPA's mandate, per MoEFCC, is to decide which project types may participate in the international carbon market under Article 6 mechanisms.

Article 6.2 specifically covers carbon trading through bilateral or cooperative approaches — government-to-government or entity-to-entity arrangements where one country (the Host Party, here India) hosts an emissions-reduction project and transfers the resulting mitigation outcome internationally, typically to help another country meet its own Paris Agreement commitments. This is structurally distinct from CCTS: CCTS is a domestic industrial compliance and offset system; Article 6.2 is India acting as a supplier of internationally transferable mitigation outcomes (ITMOs) to other governments, explicitly framed by MoEFCC as a way to "facilitate transfer of emerging technologies and mobilise international finance in India."

On 17 February 2023, MoEFCC finalised the list of activities eligible for Article 6.2 bilateral trading as Host Party. The list — thirteen activities across three categories — is reproduced here in full, as notified:

I. GHG Mitigation Activities

1. Renewable energy with storage (only the stored component)
2. Solar thermal power
3. Off-shore wind
4. Green Hydrogen
5. Compressed bio-gas
6. Emerging mobility solutions like fuel cells
7. High-end technology for energy efficiency
8. Sustainable Aviation Fuel
9. Best available technologies for process improvement in hard-to-abate sectors
10. Tidal energy, Ocean Thermal Energy, Ocean Salt Gradient Energy, Ocean Wave Energy and Ocean Current Energy
11. High Voltage Direct Current Transmission in conjunction with renewable energy projects

II. Alternate Materials

12. Green Ammonia

III. Removal Activities

13. Carbon Capture Utilization and Storage

Two honest caveats on this list, both stated plainly because the sources here don't resolve them either way. First, MoEFCC's release says the list "will initially be for the first 03 years and may be updated/revised by NDAIAPA" — from a 17 February 2023 release, that three-year window has now technically elapsed. Whether the list has since been revised, extended, or replaced is not established in the sources gathered here; it would be worth checking MoEFCC's more recent releases before treating this exact thirteen-item list as still current. Second, eligibility is not the same as a transaction — nothing in the sources gathered here shows that any specific CBG project (or any project on this list) has actually transacted carbon credits under Article 6.2 to date.

Part 4 — Where the Two Tracks Meet (and Where They Don't)

Put plainly: India now runs two separate carbon-credit systems that serve different purposes and, on present evidence, don't appear to be fungible with each other.

• CCTS / Indian Carbon Market is a domestic compliance-and-offset system. It prices emissions within India's own industrial base — obligated entities in designated sectors (Aluminium, Cement, Chlor-Alkali, Pulp & Paper, and now Petroleum Refineries, Petrochemicals, Textiles, Secondary Aluminium) trade Carbon Credit Certificates among themselves to meet nationally set GEI targets.
• Article 6.2 is an international bilateral mechanism. India acts as Host Party, allowing specific eligible project types (including CBG) to generate internationally transferable mitigation outcomes that other countries can use toward their own Paris Agreement commitments, in exchange for technology transfer and international finance flowing into India.

Nothing in the sources gathered for this article shows an explicit operational linkage between the two — no stated mechanism by which a domestic CCTS Carbon Credit Certificate converts into, or is fungible with, an Article 6.2 international credit. They read as two separate registries, governed by two separate legal instruments (the CCTS notification vs. NDAIAPA's Article 6.2 mandate), serving two separate purposes (domestic industrial decarbonisation vs. international finance and technology mobilisation). That is a description of what the sources establish, not a claim that no linkage exists anywhere in the broader regulatory architecture — it is simply not shown here, and worth watching for future notifications that might formally bridge the two.

Closing: the carbon-credit leg, now confirmed

The bio-fertiliser article made a "multiple legs" argument for CBG plant viability: a single facility can draw income from gas sale under the SATAT pricing framework, from the FOM/LFOM fertiliser subsidy on its by-product, and — tentatively, based on an unretrieved circular — from carbon credits. Part 3 above confirms that third leg directly: Compressed Bio-Gas is item 5 on MoEFCC's own finalised Article 6.2 eligible-activities list. A CBG plant today has at least three distinct, separately sourced policy income streams available to it in principle — gas sale, fertiliser subsidy, and carbon-credit eligibility — with the third now resting on a primary government notification rather than an inference.

What would need tracking from here: whether and when GEI targets are finally notified for the Fertiliser and Iron & Steel sectors under CCTS — the live thread connecting straight back to an earlier piece's fertiliser-and-soil-fertility coverage; whether MoEFCC has revised or extended the 2023 Article 6.2 activity list past its original three-year window; and whether any CBG project (or any project on the Article 6.2 list) has actually transacted credits under the mechanism, as opposed to simply being eligible to. None of those three questions are answered in the sources gathered for this article.

Sources

• PIB, Ministry of Environment, Forest and Climate Change, "Government notifies Greenhouse Gas Emission Intensity Targets for 208 more Carbon-intensive Industries," 22 January 2026 (Release ID 2217239).
• PIB, Ministry of Environment, Forest and Climate Change, "Activities finalised to be considered for trading of carbon credits under Article 6.2 mechanism to facilitate transfer of emerging technologies and mobilise international finance in India," 17 February 2023 (Release ID 1900216).
• Carbon Credit Trading Scheme, 2023 — notified by the Government of India, S.O. 2825(E), 28 June 2023, under clause (w) of Section 14, read with Section 14AA, of the Energy Conservation Act, 2001 (as amended in 2022).
• Greenhouse Gas Emission Intensity Target Rules, 2025 (Draft) — G.S.R. 234(अ)/S.O. 234(अ), Gazette No. 195, 16 April 2025, published for public comment.
• Greenhouse Gas Emission Intensity Target Rules, 2025 (Final) — G.S.R. 739(E), Gazette No. 655, 8 October 2025.
• Gazette Notification dated 30 May 2022 notifying the National Designated Authority for the Implementation of the Paris Agreement (NDAIAPA).
• Law-firm ESG commentary on the Greenhouse Gases Emission Intensity Target Rules, 2025 (secondary legal/ESG analysis, cited generically).

This analysis is based on publicly available government notifications, gazette documents, and press releases cited in the article above. It is provided for informational and research purposes only and does not constitute investment, legal, or policy advice.

GOBARdhan is part of a wider biofuels policy cluster on this blog: see the dedicated piece on India's biogas programme and cattle-dung feedstock, and the coverage of India's ethanol overcapacity and the sustainable aviation fuel (SAF) pathway.

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.