Why in news
- India and the European Commission held bilateral talks on aligning India's domestic carbon market with the EU's Carbon Border Adjustment Mechanism (CBAM).
- India highlighted the notification of emission intensity reduction targets for 490 industrial units under the domestic Carbon Credit Trading Scheme (CCTS).
Key terms
Carbon Credit Trading Scheme (CCTS)
India's institutional framework for trading carbon credit certificates among obligated industrial entities.
Carbon Border Adjustment Mechanism (CBAM)
An EU tariff mechanism on carbon-intensive goods imported into the EU based on embedded carbon emissions.
Monitoring, Reporting, and Verification (MRV)
Standardised protocols used to measure and verify greenhouse gas emissions produced by industrial facilities.
Emission Intensity
The volume of greenhouse gases emitted per unit of economic output or physical product.
What is the Carbon Credit Trading Scheme (CCTS)?
- Notified under the Energy Conservation Act, 2001, to establish a domestic cap-and-trade market in India.
- Sets mandatory emission intensity reduction targets for obligated entities across carbon-intensive sectors.
- Administered by the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
Key developments and EU CBAM interface
- India has notified target allocations for 490 industrial units to transition towards low-carbon operations.
- Bilateral discussions with the EU focused on technical alignment regarding Monitoring, Reporting, and Verification (MRV) systems to mitigate CBAM tariffs on Indian exports.
- India highlighted its non-fossil power capacity reaching 308 GW out of a total installed capacity of 558 GW.
Why it matters
- CBAM imposes carbon costs on carbon-intensive imports into the EU; mutual recognition of India's domestic carbon pricing prevents double taxation on Indian exporters.
- Supports India's Updated Nationally Determined Contribution (NDC) target of reducing GDP emission intensity by 45% by 2030 from 2005 levels.
Prelims facts
- CCTS is notified under the Energy Conservation Act, 2001.
- Bureau of Energy Efficiency (BEE) acts as the administrator for the domestic carbon market.
Mains discussion
- Impact of EU CBAM on Indian manufacturing exports and strategy for bilateral carbon pricing recognition.
- Role of market-based mechanisms in achieving India's NDC targets.
Source: PIB English
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