To operate in the Carbon Credit Trading Scheme, entities must register with the official ICM portal and registry. BEE has opened a window for non-obligated entities to register as voluntary participants (non-obligated) on the ICM Portal (launched June 2025). Obligated entities should watch for notifications of their formal inclusion and then quickly register on the ICM Registry to trade CCCs. In practice, once an obligated entity is issued CCCs by BEE (after target assessment), it has 4 weeks to register on the ICM registry (with GCIL) by submitting details and fees as per CERC rules. Non-obligated buyers or project developers must similarly register on the ICM Registry before trading or receiving CCCs. Upon successful registration, the ICM Registry issues a Certificate of Registration to the entity. This certificate is mandatory for participating in power-exchange trading: no corporate can buy or sell CCCs on the exchanges without first obtaining it. Each covered entity is assigned a historical baseline derived from FY 2023-24 data.
EMISSIONS MONITORING: DATA, PLANS, AND AUDITS
Obligated entities must set up robust GHG monitoring and reporting systems. The law requires each covered company to define a fixed “gate to gate” boundary and record both direct (Scope 1, e.g. fuel combustion and process emissions) and indirect (Scope 2, e.g. purchased power) emissions. Within 3 months of the compliance cycle start, the company must submit a detailed Monitoring Plan to BEE. This plan (prepared “in consultation” with an accredited carbon auditor) must include: a description of all plant activities, sources and streams of GHG emissions, meter/sampling points, data flow and control procedures, and QA/QC for fuel measurements. Fuel characteristics (net calorific value, carbon content) must be determined by testing (preferably in a NABL-accredited lab).
On an ongoing basis, the entity must track all fuel/material inputs and outputs and convert them to tCO₂e using BEE’s specified methods. In practice this means multiplying fuel quantity (in tonnes of oil equivalent, TOE) by standard emission factors (tCO₂/TOE) based on actual NCV and applying an oxidation factor (default 1 if unknown). Indirect emissions from electricity are calculated using the latest grid-emission factor published by the Central Electricity Authority or supplier-specific factors (with proof). Biogenic carbon emissions (from biomass, e.g. bagasse) are excluded from compliance intensity (but should be reported separately). In short, companies must maintain verifiable fuel/emissions records and run BEE’s conversion formulas to generate their annual GHG totals.
PERFORMANCE ASSESSMENT AND VERIFICATION
After each compliance year, the entity must assess whether it has met the GEI target. Within 4 months of the cycle’s close, the company submits its Performance Assessment Document (Form A) to BEE, showing actual vs. target emission intensity. Crucially, the assessment must be duly verified by a BEE-accredited Carbon Verification Agency (ACVA). An entity cannot self-certify or use its internal consultants for this – the scheme mandates third-party verification. The ACVA conducts a full audit of data and calculations, then issues Form B(Certificate of Verification) confirming the entity’s compliance status.
In parallel, the entity must commission an independent check-verification. This is essentially a second audit by a different accredited agency, who reviews the ACVA’s work. The check-verifier issues Form C: Certificate of Check-Verification (Annexure VIII), attesting that the performance data and the primary verification were carried out “diligently and truthfully”. (This dual-verification requirement is unique to India’s scheme.) All submissions (Form A, B, C and supporting documents) go to BEE. The Bureau – or CPCB on its behalf – may even trigger a compliance audit on its own or upon complaint for up to a year after submission.
COMPLIANCE SURRENDER, TRADING AND PENALTY
If the verified results show the entity undershot its target, BEE (via the National Steering Committee) will issue a corresponding number of CCCs within weeks. The company can then sell or bank these credits. If the company overshot its target (i.e. emitted more), it must purchase CCCs from the market equal to the shortfall. Trading happens on the exchanges: each CCC is fungible and listed as per CERC guidelines. Importantly, companies must register any CCC trades in their ICM registry account (the same entity account registered above) before settlement. CCCs are bankable indefinitely for future compliance years, but borrowing against future credits is not allowed. At the end of the cycle’s trading window (last trading day), the entity must surrender all CCCs (own + purchased) needed to reach its target.
Within 2 weeks of the last trading session, the entity submits the Compliance Assessment Document (Form D) to BEE. This form summarizes CCCs generated, purchased, and surrendered for the cycle. Finally, by 9 months after cycle-end, the company must finalize compliance: it either demonstrates it met the target through internal measures, or documents credit purchases to cover any gap. Penalties for noncompliance are severe. If an obligated entity fails to deliver enough CCCs to meet its target by the deadline, the Central Pollution Control Board will impose “environmental compensation” (a fine) equal to twice the average market price of CCCs for that compliance year. An ACVA itself is subject to oversight; if an accreditor violates criteria (such as conflicts of interest or false reporting), BEE has the authority to suspend or withdraw them.
VOLUNTARY OFFSET PROJECTS
Non-obligated entities can independently earn CCCs via the Offset Mechanism by registering on the ICM portal and developing a Project Design Document (PDD) as per BEE- approved methodologies (such as renewables, energy efficiency, waste-gas capture, afforestation, green hydrogen etc), ensuring projects commence on or after 1 Jan 2025 and must be additional (not double-counted under any other market).The project is then validated by an accredited ACVA, followed by submission to BEE for registration. A Technical Committee reviews monthly; approved projects are listed as “ICM Offset Projects”. The project owner implements and monitors the activity, measuring reductions at defined intervals (typically annually). A separate ACVA conducts ex-post verification and provides periodic updates to BEE. The ACVA compiles a Verification Report and requests CCC issuance through the ICM portal. BEE performs a completeness check (10 working days) then technical and expert reviews (30 days+). The Technical Committee may ask for clarifications; after all queries are cleared, the National Steering Committee recommends issuance. Only then does BEE credit the CCCs to the project owner’s account.
90-180 DAY CORPORATE READINESS PLAN
With the scheme rolling out, companies should take immediate action. Key steps in the next 3-6 months include:
- Determine Applicability: Watch for official gazette notifications of obligated sectors. If in scope, confirm target timelines. If not, decide if voluntary project development is a strategic opportunity.
- Establish Governance: Assign a team or CCTS compliance officer to the board or ESG committee. Make sure the CSR/compliance charters are updated and the Board is briefed.
- Baseline GHG Inventory: If you haven’t already, gather energy and process data for FY2023-2024. Going forward, set up data collection systems (metering, ledger) for both direct emissions (fuel, process) and indirect emissions (power).
- Monitoring Plan and Controls: Within three months of the cycle beginning, create the official GHG Monitoring Plan (see Annexure of Procedure) and submit it to BEE. Determine emission limits and measurement procedure. Internal QA/QC of the institute, including calibration, fuel sampling, attendance records, etc. to guarantee reliable information.
- Hire Accredited Auditors: For upcoming validation and verification tasks, shortlist and hire Accredited Carbon Verification Agencies (ACVAs). Take note of the updated requirements: lead verifiers need to have industry experience and ISO 14064 certification.
- Data and Lab Testing: Commission fuel testing (proximate/ultimate analysis) for your primary fuels (coal, natural gas, etc.) to establish NCV and carbon content. Arrange metering and reporting for all fuel/material flows.
- Financial Planning: Budget capital projects (EE, fuel-switching, process improvements) that could reduce intensity. Evaluate the cost of purchasing credits vs. investing in abatement.
- Register and File Paperwork: As soon as the ICM Portal opens for obligated entities, register on it to get a Registered Entity number. Prepare to submit Form A (performance) and ancillary forms in the prescribed formats.
- Offset Opportunities: If interested in voluntary offsets, identify potential projects, engage ACVA for project validation (see sector scope), and plan budget for verification.
- Internal Audit Alignment: Integrate CCTS checks into the internal audit and compliance calendars. For example, have internal teams review data and documentation well before the ACVA audit.
By methodically implementing these steps companies can stay ahead of CCTS compliance. The penalties are steep and deadlines are tight; proactive preparation in the next 3-6 months will make CCTS compliance a disciplined process rather than a last-minute scramble.
Disclaimer
The information provided in this article is intended for general informational purposes only and should not be construed as legal advice. The content of this article is not intended to create and receipt of it does not constitute any relationship. Readers should not act upon this information without seeking professional legal counsel.