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 represents one tonne of carbon dioxide equivalent. 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. These trade on the power exchanges. Price here is set by how far the notified entities collectively are from their targets. If most entities beat their targets, supply floods the market and prices sink. If most miss, prices climb. It is a closed system, and the government has discussed floor and ceiling prices to stop wild swings. [VERIFY: confirm current floor/ceiling status and latest traded price before publishing.]
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. Prices here tend to sit below the compliance market because the buyer pool is thinner.
The international voluntary market. Verra and Gold Standard credits from Indian projects. This is where the spread gets wild. A renewable energy credit with an older vintage might clear at $2 or $3. A cookstove credit with strong health co-benefits and recent verification can fetch $10 to $15. Removal credits, the kind that actually pull carbon out of the air rather than avoid emissions, go far higher. [VERIFY: refresh these ranges against current Verra/Gold Standard marketplace data at publication.]
Same tonne of CO2. Five times the price. Because buyers in the voluntary market aren’t really buying tonnes, they are 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 are not 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.
Why the EU price should worry Indian exporters
The EU Emissions Trading System has been running for two decades and prices carbon dramatically higher than anything traded in India. That gap is not an academic curiosity. It is the basis of the CBAM levy.
Under the Carbon Border Adjustment Mechanism, EU importers pay the difference between the EU carbon price and whatever carbon price you already paid at home. If India’s domestic price is low, the gap you have to cover at the EU border is large. Steel, aluminium, cement, fertiliser and hydrogen exporters are all exposed. We covered the practical steps in what Indian exporters must do before the 2026 CBAM deadline.
So a low domestic carbon price is not the good news it sounds like. For anyone shipping to Europe, it is a transfer of value from Indian producers to the EU treasury.
What obligated entities should actually budget
If you have been notified under the CCTS, the maths is not really about the market price. It is about your own gap.
Start by knowing exactly where you stand against your emission intensity target. If you have not 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 reducing emissions in your own plant. A waste heat recovery project that costs ₹800 per tonne abated is cheaper than buying at ₹1,200, 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 would 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 are not registered on the ICM portal yet, that is 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 credits, the power exchanges publish trade data. 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
How much is 1 carbon credit worth in India? Depends entirely on which market. Compliance credits under CCTS trade on the power exchanges at a price set by the collective gap between obligated entities and their targets. Voluntary credits from Indian projects sell internationally anywhere from a couple of dollars to well into double digits 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 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 is a reasonable expectation, not a forecast. Do not build a business case that depends on it.
Do carbon credits expire? Credits do not expire in the sense of vanishing, but vintage matters to buyers and compliance rules set which vintages can be surrendered in which year. 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 have 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