Every week someone asks us a version of the same question. What is the rate? How much is one carbon credit worth in India right now?
I understand why people want a single number. It would make budgeting so much easier. But there isn’t one, and anybody who gives you a clean figure without asking three questions first is guessing.
Here’s the useful version of the answer.
First, what you are actually buying
One carbon credit is equal to one tonne of carbon dioxide equivalent (tCO2e). Not one kilogram. This trips people up constantly, and it explains why “carbon credit price in India per kg” is a search people actually type. If you want the per kilogram figure, take the tonne price and divide by a thousand. A credit trading at ₹1,000 works out to ₹1 per kilogram of CO2e.
The “equivalent” part matters too. Methane, nitrous oxide and refrigerant gases all get converted into CO2 equivalent using global warming potential factors before anything gets issued. So a credit from a landfill gas project and a credit from a solar project are, in theory, the same unit.
In practice they are not priced the same at all. Which brings us to the real reason there is no single rate.
There are three different markets, and they price differently
The compliance market under CCTS. India’s Carbon Credit Trading Scheme creates Carbon Credit Certificates that obligated entities must surrender against their emission intensity targets. Entities that beat their target earn certificates. Entities that miss it have to buy them. These trade on the power exchanges, so the price is set by how far the notified entities collectively are from their targets. If most beat their targets, supply floods the market and prices sink. If most miss, prices climb.
It’s a closed system, and there’s no settled market price yet. The first official trades of compliance certificates are expected around October 2026. Two design details matter more than any early price estimate. Unused certificates can be banked without limit, either sold later or held for future compliance years. Borrowing against future years isn’t allowed.
If your company is one of the notified obligated entities, this is the only price that matters to you. We wrote about how the whole mechanism works in India’s Carbon Credit Trading Scheme: a plain-language guide.
The domestic offset mechanism. This is the voluntary side of CCTS, open to entities that aren’t obligated. Non-obligated companies register projects, get credits issued, and sell them. One thing people get wrong here: offset credits can’t be surrendered against a compliance obligation. If you’re an obligated entity with a shortfall, cheap offsets aren’t your way out. You need compliance certificates.
The international voluntary market. Verra and Gold Standard credits from Indian projects. This is where the spread gets wild. Older renewable energy credits sit at the cheap end, often a few dollars a tonne. Recent cookstove credits with strong health co-benefits trade well above that. And removal credits, the kind that actually pull carbon out of the air rather than avoid it, go higher still.
Same tonne of CO2. Wildly different prices. Because buyers in the voluntary market aren’t really buying tonnes, they’re buying a story they can put in an annual report.
What actually moves the price
Project type. Avoidance credits (a wind farm that displaced coal power) sit at the bottom. Removal credits (afforestation, biochar, direct air capture) sit at the top. Buyers have gotten a lot more sceptical about avoidance in the last two years.
Vintage. The year the reduction happened. A 2016 credit and a 2025 credit aren’t treated as equals, even though the physics is identical. Older vintages get discounted hard.
Co-benefits. A project that also delivers clean drinking water or rural employment can command a premium. Buyers who need SDG alignment in their reporting will pay for it.
Standard and registry. Gold Standard credits typically price above Verra. Credits from the older CDM pipeline trade at a discount.
Volume. Buying 500 tonnes and buying 50,000 tonnes gets you very different quotes.
What CBAM means for Indian exporters
The EU Emissions Trading System has been running for two decades and prices carbon far higher than anything traded in India. That gap is the basis of the CBAM levy.
Under the Carbon Border Adjustment Mechanism, importers pay for the embedded emissions in covered goods, with a deduction for carbon price already paid in the country of origin. So the size of your domestic carbon price directly affects what your buyer pays at the border. Steel, aluminium, cement, fertiliser and hydrogen exporters are all exposed. We covered the practical steps in what Indian exporters need to do about CBAM.
The UK has moved first on this. In September 2026 it officially recognised India’s CCTS as a qualifying carbon pricing framework under its own CBAM, which reduces the effective liability on Indian exports to the UK. That’s a real win for anyone shipping there.
Whether the EU follows is the thing to watch. Until it does, a low domestic price isn’t the good news it sounds like for EU exporters. The gap still gets paid, just at the European border instead of in India. And either way, your buyer will want product level emissions data, which is essentially a life cycle assessment by another name.
What obligated entities should actually budget
If you’ve been notified under the CCTS, the maths isn’t really about the market price. It’s about your own gap.
Start by knowing exactly where you stand against your emission intensity target. If you haven’t calculated that properly, nothing else you do here is reliable. We walked through the methodology in GHG emission intensity targets explained.
Then run the comparison that actually matters: the cost per tonne of buying credits versus the cost per tonne of cutting emissions in your own plant. Say a waste heat recovery project works out to ₹800 per tonne abated and certificates are trading at ₹1,200. The project wins, and it keeps paying you back after the compliance year ends. Buying is faster. Reducing is usually cheaper over five years. We laid out the full decision framework in carbon credits: should you buy or reduce.
One thing I’d flag from experience. Companies tend to underestimate how long registration and verification take, then find themselves buying credits at the worst possible moment because they ran out of runway. If you aren’t registered on the ICM portal yet, that’s the first thing to fix. The documentation requirements are laid out in our carbon credit registration compliance guide.
Where to check live prices
For CCTS compliance certificates, the power exchanges will publish traded prices once compliance trading opens. For international voluntary credits, the Verra and Gold Standard registries plus the major marketplaces show recent transactions. Be careful with the aggregator sites that publish a single “carbon price today” figure. They usually mean the EU allowance price, which has almost nothing to do with what an Indian project developer will get paid.
Questions we get asked
What is 1 carbon credit equal to? One carbon credit is equal to one tonne of carbon dioxide equivalent (tCO2e). Other greenhouse gases like methane are converted into CO2 equivalent before credits are issued.
How much is 1 carbon credit worth in India? Depends entirely on which market. Compliance certificates under CCTS will trade on the power exchanges, with first trades expected around October 2026, at a price set by the collective gap between obligated entities and their targets. Voluntary credits from Indian projects sell internationally anywhere from a few dollars a tonne to much more, depending on project type and vintage.
Is the carbon credit price in India per kg or per tonne? Per tonne of CO2 equivalent. Divide by 1,000 for the per kilogram figure.
Can offset credits be used for CCTS compliance? No. Offset credits from the voluntary side of CCTS can’t be surrendered against a compliance obligation. Obligated entities with a shortfall need compliance certificates.
Can a small company sell carbon credits in India? Yes, through the offset mechanism under CCTS if the project fits an approved methodology, or through an international standard like Verra or Gold Standard. The economics only work above a certain project size, because verification costs are largely fixed. Aggregating across multiple small sites is often the way to make it viable.
Will the price go up? Most people in the market expect compliance prices to firm up as targets tighten and more sectors get notified. That’s a reasonable expectation, not a forecast. Don’t build a business case that depends on it.
Do carbon credits expire? Under CCTS, compliance certificates can be banked without limit and used in future compliance years. In the voluntary market, vintage matters a lot to buyers, so holding old credits hoping for a better price is usually a losing trade.
Bilancia Consulting is an Ahmedabad based sustainability and ESG advisory firm. We help Indian companies with carbon credit strategy and low carbon solutions, GHG accounting, and CCTS compliance. If you’ve been notified as an obligated entity and are working out your position, a short call is the fastest way to know where you stand.
Call +91-9510144494 or email general@bilanciaconsulting.co.in