“Carbon is no longer just a cost. It’s a currency — and India is on the brink of minting it.”
As the world races toward net-zero, carbon markets are fast becoming one of the most powerful financial mechanisms to drive climate action. Globally, the voluntary carbon market crossed $2 billion in 2023, and with the introduction of compliance markets in emerging economies, this figure is expected to multiply over the next five years.
India, the world’s third-largest emitter of greenhouse gases, is now entering a decisive phase. The convergence of regulatory action, market readiness, and international interest has set the stage for India to lead the global South in carbon finance innovation.
The Policy Landscape: From Promise to Framework
In December 2022, India passed amendments to the Energy Conservation Act, granting the government the authority to establish a domestic carbon credit trading scheme. This signaled a bold shift from project-based offsets to a full-fledged carbon market regulated by the Bureau of Energy Efficiency (BEE) and the Ministry of Power.
While India has had a Perform, Achieve and Trade (PAT) scheme for energy efficiency in place since 2012 — credited with saving over 60 million tonnes of CO₂ — it is now expanding its scope. The new carbon credit framework will go beyond industry and include sectors like agriculture, transport, and buildings, opening the door for more inclusive and scalable mitigation strategies.
Readiness: Who’s Buying, Who’s Selling?
Carbon markets thrive on trust and transparency. As India develops its compliance market, the ecosystem is rapidly evolving. Key players include:
Corporates: Over 100 Indian companies have made net-zero commitments, with leaders like Reliance Industries, Tata Consultancy Services, and Mahindra Group leading the charge. These organizations are positioning themselves as both buyers and developers in the evolving carbon marketplace.
Project Developers: Companies like Verra-certified Ekologi and CarbonCraft Design are pioneering innovations from biochar production in Assam to carbon-negative building materials. Social enterprise Selco Foundation is creating impactful renewable mini-grids in Tamil Nadu that generate valuable carbon credits.
Fintech Platforms: Tech innovators such as EKI Energy Services, Creduce, and ClimateConnect are building blockchain-based carbon trading platforms and registries that enhance transparency and solve the double-counting challenge plaguing traditional markets.
However, challenges remain. According to a 2024 report by FICCI, 67% of surveyed Indian businesses cited regulatory uncertainty and lack of standardized methodologies as barriers to active participation.
The Opportunity: Why Carbon Markets Could Be India’s Next Green Gold Rush
India has what many countries don’t — abundant land for reforestation, a vast agricultural base ripe for regenerative practices, and a population that can directly benefit from decentralized climate projects. If executed with integrity and transparency, India’s carbon market could generate $90 billion in revenue by 2030, according to a projection by the Council on Energy, Environment and Water (CEEW).
More importantly, this isn’t just about trading emissions — it’s about channeling capital into communities, incentivizing green innovation, and enhancing India’s climate diplomacy.
Global Alignment: India’s Role in Article 6 of the Paris Agreement
The international carbon market under Article 6 allows countries to trade emission reductions. With clear guidance emerging from COP28, India is poised to participate more actively. The alignment of domestic schemes with Article 6 will be essential — both to maintain credibility and to ensure Indian carbon credits are globally fungible.
The success of this alignment will depend on MRV (Monitoring, Reporting, Verification) infrastructure, third-party validation systems, and a digital-first approach to registries.
The CARE Factor: Catalyzing Carbon Market Collaboration
This September, the CARE (Climate Action Renewable Energy) Expo in New Delhi will serve as a critical platform to accelerate the conversation on carbon markets. With over 1,500 C-level decision-makers, 75+ speakers, and global climate experts, CARE will host a dedicated Carbon Markets Pavilion, featuring case studies, project showcases, and regulatory roundtables.
As India builds its market from the ground up, CARE will bridge government, industry, investors, and civil society — ensuring that carbon finance is not just an elite mechanism but a tool for inclusive growth.
India stands at a carbon crossroads. With the right regulatory push, digital infrastructure, and international collaboration, its carbon market could become a model for emerging economies — balancing growth, equity, and sustainability.
The time for pilot projects is over. The next decade demands scale, integrity, and urgency. And in this green transition, carbon markets are not the destination — they’re the accelerator.
Join the conversation.
Shape the future.
