BEE Unveils Approved Sectors for India’s Carbon Capture and Trading System

In a significant step towards advancing the country’s climate action goals, the Bureau of Energy Efficiency (BEE) has issued a list of approved sectors under the Central Government’s Carbon Capture and Trading System (CCTS). The newly approved sectors include key industries such as energy, manufacturing, agriculture, waste management, and transport, all critical in reducing carbon emissions and fostering sustainable development.

The first phase of the CCTS will focus on sectors like energy, chemical manufacturing, waste handling, and agriculture, with technologies such as green hydrogen production, biochar usage, landfill gas capture, and afforestation being highlighted as solutions to reduce emissions. In the second phase, other sectors like construction, fugitive emissions from fuels, and carbon capture, utilization, and storage (CCUS) will be included.

Approved Sectors and Technologies (Phase 1):

1. Energy: Green hydrogen production, offshore wind, energy efficiency improvements.
2. Manufacturing Industries: Green ammonia usage, feedstock changes in chemical industries.
3. Waste Management: Biochar, landfill gas capture.
4. Agriculture: Systematic rice intensification, agroforestry.
5. Forestry: Afforestation and reforestation.
6. Transport: Modal shifts, electric vehicles and buses.

Approved Sectors and Technologies (Phase 2):

7. Construction: Limestone calcined clay cement (LC3).
8. Fugitive Emissions: Recovery of gas from oil fields.
9. Solvent Use: Industrial solvent reduction.
10. CCUS: Post-combustion carbon capture technologies.

Mr. Manish Dabkara, Chairman and Managing Director of EKI Energy Services Ltd, welcomed the development, stating, “This is a positive step for India’s carbon market. By including sectors with major carbon footprints, the offset market is poised to capture a significant share of domestic carbon credit supply.”

However, Mr. Dabkara emphasized the need for the government to introduce forward-looking policies, such as allowing a greater percentage of CCTS-registered credits for regulatory compliance to increase demand and enhance program effectiveness. He also noted that while the list of illustrative technologies is a good starting point, it is relatively limited and may need expansion to encourage broader innovation.

With the approved offset mechanism now in place, India’s carbon market is expected to grow, helping the country reduce its carbon emissions and positioning it as a key player in the global carbon credit supply chain.