Indian Carbon Market: Offset Mechanism Procedures Approved
Why in the news
Procedures for the Indian Carbon Market’s offset mechanism were approved, moving the carbon market from framework to working system.
Key facts
- Eight sectors are covered, including mangrove afforestation or reforestation, landfill methane recovery, green hydrogen, renewable energy and industrial energy efficiency.
- Introduced in December 2023, the offset mechanism rewards non-obligated entities with carbon credits when they run climate projects of their own accord.
- It puts the Carbon Credit Trading Scheme (notified June 2023) into action.
Significance
- Brings in private firms outside compliance obligations.
- Broadens credit generation beyond traditional renewables.
- Backs the Net Zero 2070 target by rewarding low-carbon technology.
- A strong voluntary market may draw domestic and foreign investment.
Concerns
- Credits must be accurately measured and verified to avoid greenwashing.
- Enough demand for voluntary credits is needed for financial viability.
- Clear methodologies and sector guidelines are essential.
Exam angle
- Number of sectors: eight; Net Zero year: 2070.
- Carbon Credit Trading Scheme notified June 2023; offset mechanism December 2023.