India’s compliance carbon market is about to go from paperwork to actual trades. The first Carbon Credit Certificates under the Carbon Credit Trading Scheme (CCTS) are expected to change hands around October 2026. If your company is an obligated entity, this is the month the scheme stops being a reporting exercise and starts costing, or earning, real money.
Here’s how the market is set up, who can trade, and what needs to be in place before the first session.
What’s actually being traded
The unit is the Carbon Credit Certificate, or CCC. One CCC equals one tonne of carbon dioxide equivalent.
Obligated entities have emission intensity targets for FY 2025-26 and FY 2026-27, measured against a FY 2023-24 baseline. Beat your target and the Bureau of Energy Efficiency (BEE) issues you certificates for the difference. Miss it and you have to buy certificates and surrender them to cover the gap.
So the market is really a transfer between two groups: plants that did better than required and plants that didn’t. There’s no government auction selling certificates into the market. Every CCC someone buys, someone else earned.
If you want the background on how targets and certificates are set, our plain-language guide to CCTS covers it.
Where trading happens
The Central Electricity Regulatory Commission (CERC) notified its regulations for buying and selling CCCs in March 2026. Under those rules, certificates are traded through CERC-registered power exchanges: Indian Energy Exchange (IEX), Power Exchange India Limited (PXIL) and Hindustan Power Exchange (HPX).
A few features stand out:
Scheduled sessions, not continuous trading. CERC’s rules provide for trading on a monthly basis, or at another frequency CERC approves. You won’t be watching a live ticker. You’ll be placing bids in a session and waiting for the result.
A price band. Certificates trade between a floor price and a forbearance (ceiling) price. BEE proposes the band and CERC approves it. Check the current band with your exchange before you plan a budget around any single number.
Exchange only. CCCs are dealt through the power exchanges. You can’t strike a private deal with the plant down the road and settle it off the books.
Who can trade
Two groups:
Obligated entities. Around 490 entities across seven sectors have active compliance obligations: aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles. They sell surplus certificates or buy to cover a shortfall.
Non-obligated entities. Companies outside the compliance scheme can register, and those running approved offset projects can earn certificates. One important limit here. Offset certificates can’t be used to meet a compliance obligation. The two sides share a registry, but an obligated entity that’s short needs compliance certificates.
What you need before the first session
Two registrations, and they’re separate.
- The ICM Registry. Grid Controller of India (Grid-India) runs the Indian Carbon Market registry. This is where your certificates actually sit. Issuance, transfers and surrenders all happen through your registry account. If you’re an obligated entity you should already be registered. If you aren’t, stop reading and fix that first. Our carbon credit registration guide walks through the documents.
- A power exchange account. Registry registration doesn’t let you trade. You also need to be onboarded with at least one of the exchanges under its own bylaws. Many large manufacturers already hold exchange accounts for electricity or renewable energy certificates, but carbon trading still needs to be set up under the CCC rules. Check with your exchange contact rather than assuming the power account covers it.
Then the internal side, which is where companies usually get caught out:
- Who in the company is authorised to place bids?
- What’s the approval limit before a bid needs board or CFO sign-off?
- Is the cost treated as an operating expense, and how will you account for certificates you hold?
None of this is complicated. It just takes longer than people expect, and the first session doesn’t wait for your approval matrix.
How the price will be set
Nobody knows yet, and anyone quoting a firm number is guessing. The price will come from how far the covered sectors collectively land from their targets. If most plants beat their targets, sellers outnumber buyers and prices sit near the floor. If most miss, prices climb towards the ceiling.
Two design choices will shape it:
Banking is unlimited. Surplus certificates don’t have to be sold this year. They can be held for later compliance years or sold later. That gives sellers a reason not to dump everything in the first session, especially since FY 2026-27 targets are tighter.
Borrowing isn’t allowed. A plant that’s short this year can’t count on next year’s performance. The gap has to be covered now.
There’s also a hard backstop. An entity that doesn’t surrender enough certificates faces environmental compensation of twice the average CCC trading price for that compliance cycle, levied by the Central Pollution Control Board. So paying the penalty is always more expensive than buying on the exchange. We break down the full price picture in carbon credit price in India.
What to do this month
If you’re an obligated entity:
- Confirm your registry account works. Log in. Check that the right people have access.
- Get onboarded with an exchange. Don’t leave this until the week of the first session.
- Work out your likely position. Your verified Form A numbers tell you roughly whether you’re long or short. Don’t wait for BEE’s final figure to start planning.
- Decide your approach before prices exist. If you’re short, do you buy early, wait for later sessions, or fund an abatement project? We laid out that choice in carbon credits: should you buy or reduce.
If you’re not obligated but you export steel, aluminium or cement, keep watching. A domestic carbon price matters at the border too, and the UK has already recognised CCTS under its own CBAM.
Questions we get asked
When does carbon credit trading start in India? The first trades of compliance Carbon Credit Certificates are expected around October 2026, on CERC-registered power exchanges.
Where are carbon credits traded in India? Carbon Credit Certificates trade through CERC-registered power exchanges: Indian Energy Exchange (IEX), Power Exchange India Limited (PXIL) and Hindustan Power Exchange (HPX).
Who can buy carbon credits in India? Obligated entities under CCTS, to cover a shortfall against their targets, and registered non-obligated entities. Both need an ICM Registry account and an account with a power exchange.
Is there a price limit on carbon credit certificates? Yes. Certificates trade within a band between a floor price and a forbearance price, proposed by BEE and approved by CERC.
Can obligated entities use offset credits for compliance? No. Offset certificates earned by non-obligated entities can’t be surrendered against a compliance obligation.
What happens if an obligated entity doesn’t buy enough certificates? It faces environmental compensation of twice the average price at which certificates traded during that compliance cycle, levied by the Central Pollution Control Board.
Bilancia Consulting is an Ahmedabad based sustainability and ESG advisory firm. We help obligated entities with GHG accounting, CCTS compliance and carbon credit strategy. If trading is about to open and you aren’t sure where you stand, a short call is the fastest way to find out.
Call +91-9510144494 or email general@bilanciaconsulting.co.in