India Greenlights Carbon Credits for Renewables & Green Hydrogen

The Indian government has approved a comprehensive offset mechanism for eight sectors, including renewable energy and green hydrogen production, allowing entities to earn carbon credits for verified emission reductions. This initiative supports voluntary climate action and incentivizes projects that help curb greenhouse gas emissions.

An offset mechanism enables businesses to balance their emissions by investing in projects that reduce, remove, or prevent emissions elsewhere. The government’s approval marks a crucial step in implementing the "Offset Mechanism under ICM [Indian Carbon Market]," as announced by the Ministry of Power.

The newly approved methodologies expand the scope for climate-friendly projects, allowing India to leverage emission reductions beyond regulated sectors. This move strengthens India’s carbon trading ecosystem, encouraging climate action across industries while driving investments in renewable and sustainable technologies.

The Carbon Credit Trading Scheme, introduced in June 2023, laid the groundwork for India's carbon market. A December 2023 amendment further broadened its reach by enabling non-obligated entities to participate in voluntary climate mitigation efforts.

News by Rahul Yelligetti.