Lok Sabha Question No. 921 (UNSTARRED), answered on 2026-02-05
Subject: Effectiveness of Carbon Market
Ministry: POWER
Asked by: Shri Damodar Agrawal, Dr. Manna Lal Rawat, Shri Manish Jaiswal, Smt. Shobhanaben Mahendrasinh Baraiya, Shri Praveen Patel

## GOVERNMENT OF INDIA MINISTRY OF POWER

## LOK SABHA UNSTARRED QUESTION NO.921 ANSWERED ON 05.02.2026

## EFFECTIVENESS OF CARBON MARKET

†921.  SHRI MANISH JAISWAL:

DR. MANNA LAL RAWAT:

SHRI DAMODAR AGRAWAL:

SMT. SHOBHANABEN MAHENDRASINH BARAIYA:

SHRI PRAVEEN PATEL:

Will the Minister of POWER be pleased to state:

- (a) the salient features of the framework for the Indian Carbon Market launched to facilitate emission reduction and climate mitigation efforts;
- (b) the details of the progress made in establishing institutional arrangements such as the carbon registry, trading mechanisms and sectoral coverage, State-wise;
- (c) the role envisaged for industries and other stakeholders by participating in the carbon market and towards achieving national climate goals;
- (d) whether  the  Government  has  instituted  any  mechanism  to  assess  the effectiveness  of  the  carbon  market  in  driving  emission  reductions  and  facilitating investment in clean technologies; and
- (e) if so, the details thereof?

## A N S W E R

## THE MINISTER OF STATE IN THE MINISTRY OF POWER

(SHRI SHRIPAD NAIK)

(a) : The  Indian  Carbon  Market  (ICM)  under  the  Carbon  Credit  Trading  Scheme (CCTS)  operates through two mechanisms, namely the Compliance Mechanism and the Offset Mechanism. Under the Compliance Mechanism, emission-intensive industries notified as Obligated Entities are required to meet assigned Greenhouse Gas Emission Intensity (GEI) targets, and entities that over-achieve their targets are eligible for issuance of Carbon Credit Certificates. Under the Offset Mechanism Nonobligated  entities,  may  voluntarily  register  approved  mitigation  activities  for  the purpose of seeking issuance of Carbon Credit Certificates.

(b) : The institutional  framework  required  for  the  operationalization  of  the  Indian Carbon Market (ICM) is already in place. Grid Controller of India Limited is functioning as the Registry, while the Central Electricity Regulatory Commission serves as the regulator for trading activities under the ICM.

Under the compliance mechanism of ICM, the Central Government has notified Greenhouse Gas Emission Intensity (GEI) reduction targets for seven energy-intensive sectors-Aluminium, Cement, Chlor-Alkali, Pulp & Paper, Petrochemicals, Petroleum Refinery, and Textiles. These targets cover 490 obligated entities, with detailed Statewise information provided in Annexure-I.

Under  the  offset  mechanism,  nine  different  methodologies  (list  Annexure-II) have been developed by the Bureau of Energy Efficiency. In  addition,  procedures  for  the  accreditation  of  carbon  verification  agencies have  been  finalized  to  ensure  robust,  transparent,  and  credible  measurement, reporting, and verification of emission reductions. (c) : Industries and other stakeholders are envisaged to drive emissions reduction under the ICM by improving efficiency, adopting low-carbon technologies, and meeting notified emissions-intensity targets, as mentioned at reply to Part (a) above. (d) & (e) : A structured Monitoring, Reporting and Verification (MRV) framework and periodic review of emissions-intensity targets by the National Steering Committee for Indian Carbon Market have already been envisaged for assessing the effectiveness of the Indian Carbon Market.

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ANNEXURE-I ANNEXURE REFERRED IN REPLY TO PART (b) OF UNSTARRED QUESTION NO. 921 ANSWERED IN THE LOK SABHA ON 05.02.2026 *************

| State            |   Total number of Obligated Entities |
|------------------|--------------------------------------|
| Andhra Pradesh   |                                   30 |
| Assam            |                                    8 |
| Bihar            |                                    4 |
| Chhattisgarh     |                                   11 |
| Dadra & Nagra    |                                   17 |
| Gujarat          |                                   71 |
| Haryana          |                                    9 |
| Himachal Pradesh |                                   14 |
| Jammu & Kashmir  |                                    1 |
| Jharkhand        |                                    7 |
| Karnataka        |                                   22 |
| Kerala           |                                    3 |
| Madhya Pradesh   |                                   29 |
| Maharashtra      |                                   29 |
| Meghalaya        |                                    8 |
| Odisha           |                                   18 |
| Puducherry       |                                    2 |
| Punjab           |                                   26 |
| Rajasthan        |                                   64 |
| Tamil Nadu       |                                   41 |
| Telangana        |                                   21 |
| Uttar Pradesh    |                                   34 |
| Uttarakhand      |                                    6 |
| West Bengal      |                                   15 |
| Total            |                                  490 |

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## ANNEXURE-II

## ANNEXURE REFERRED IN REPLY TO PART (b) OF UNSTARRED QUESTION NO. 921 ANSWERED IN THE LOK SABHA ON 05.02.2026 *************

- i. BM  EN01.001:  Grid-connected  electricity  generation  from  renewable sources;
- ii. BM EN01.002: Hydrogen production from electrolysis of water;
- iii. BM IN02.001: Energy efficiency and fuel switching measures for industrial facilities;
- iv. BM IN02.002: Hydrogen production using methane extracted from biogas;
- v. BM WA03.001: Landfill methane recovery;
- vi. BM WA03.002: Flaring or use of landfill gas,
- vii. BM AG04.002: Methane recovery from livestock and manure management at households and small farms;
- viii. BM  FR05.001:  Afforestation  and  reforestation  of  degraded  mangrove habitats;
- ix. BM FR05.002 Afforestation and reforestation of lands except wetlands
10. ***********