The Central Electricity Regulatory Commission (CERC) has released a draft notification detailing the regulations for the exchange of Carbon Credit Certificates (CCCs) under the framework of the Carbon Credit Trading Scheme, 2023. These regulations aim to create a structured market for trading carbon credits through power exchanges, encouraging transparency and compliance.
The regulations define key entities and terms, including the Bureau of Energy Efficiency as the Administrator and the Grid Controller of India as the Registry for managing CCC transactions. Obligated and non-obligated entities can trade CCCs within this system, governed by compliance and offset mechanisms outlined in the scheme.
The CCCs are defined as certificates equivalent to one ton of carbon dioxide equivalent emission reduction or avoidance. These certificates will be traded on power exchanges within price limits set by the Commission. Market operations, including registration and bidding, must align with the approved procedures and ensure that entities cannot exceed their registered CCC holdings during transactions. To maintain integrity, repeat violations can result in penalties and temporary bans from trading.
The Bureau, acting as the Administrator, is tasked with developing procedures for registration, transaction interfaces, and compliance monitoring. It will also support the Commission in ensuring transparent trading practices and reporting non-compliance. The Registry, in collaboration with power exchanges, will handle operational aspects such as updating accounts post-transaction and addressing overbidding through automated checks.
To protect market stability, the Commission has the authority to intervene during instances of unusual price volatility or trading patterns. The regulations also stipulate fees and charges to cover the costs of managing the Registry and related platforms, determined through consultations with the Bureau.
The overarching objective of these regulations is to facilitate a reliable and regulated market for carbon trading, aligning with national energy conservation and environmental protection goals. By establishing clear guidelines and oversight mechanisms, the framework aims to encourage participation from diverse sectors while supporting India’s broader climate commitments.
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