India's CCTS Now Covers 490 Companies

India's carbon market has moved from policy on paper to compliance in practice. With 490 industrial entities now covered under the Carbon Credit Trading Scheme (CCTS), emissions intensity is no longer just a sustainability metric — it is becoming a regulated measure of industrial performance.

In January 2026, the government notified 208 more obligated entities: petroleum refineries, petrochemicals, textiles, secondary aluminium. That followed 282 companies notified three months earlier, across aluminium, cement, chlor-alkali, and pulp & paper. Together, that's 490 obligated entities, all now carrying legally binding emission-intensity targets.

The number itself isn't the interesting part. What's interesting is what it forces to happen next: 490 companies now have to measure their emissions well enough that a certificate built on that data can survive a regulator, a verifier, and a buyer all checking it at once. That's a genuinely harder problem than passing a target, and it's the part almost nobody covering this story is actually explaining.

“Carbon performance is now formally quantified, targeted, and linked to a certificate that trades for real money. That single fact is why measurement, not policy, is about to become the hard part.”

What CCTS actually is

CCTS was notified in June 2023 under the Energy Conservation Act, and it's the legal spine of the Indian Carbon Market. The idea is simple: reduce, remove, or avoid emissions by putting a real market around them, using Carbon Credit Certificates as the unit of trade. What makes it different from a straightforward carbon tax is that the certificates can be earned, not just paid. A company that outperforms its target has something to sell, not just a bill to avoid.

It runs two separate tracks, and mixing them up is the single most common mistake people make when talking about India's carbon market. The Compliance Mechanism is mandatory: it's what applies to the 490 entities covered in this article, and it runs on GEI targets. The Offset Mechanism is voluntary and project-based, open to anyone running an eligible mitigation project (a mangrove restoration, a biogas plant, an agroforestry scheme) and it earns certificates through project baselines, not sectoral targets. A company inside one is not automatically inside the other, even though both eventually trade the same kind of certificate.

Where it came from

India didn't invent this from scratch. It already ran PAT (Perform, Achieve and Trade), a market where energy-intensive plants traded Energy Saving Certificates, denominated in tonnes of oil equivalent, for over a decade. It worked, in its own terms, but it measured the wrong thing for a carbon economy: saving energy isn't the same as cutting emissions, especially as the grid itself gets cleaner.

CCTS keeps PAT's institutional muscle: the same plants, the same reporting culture, many of the same compliance teams, but a completely different currency. Instead of trading energy savings, companies now trade tonnes of CO₂e. The Ministry of Power's own 2025-26 annual report confirms that all 490 current entities migrated in from PAT, which is a big part of why this transition has moved faster than a market built from zero would have. It also means most of these companies aren't new to being measured. They're new to being measured on carbon specifically, which is a different, less forgiving standard.

Who is actually covered

Two notifications, seven sectors, 490 entities. October 2025 covered aluminium, cement, chlor-alkali, and pulp & paper (282 companies). January 2026 added petroleum refineries, petrochemicals, textiles, and secondary aluminium (another 208). These are, almost by definition, India's most energy-intensive industries: the smelters, kilns, crackers, and refineries where a single percentage point of intensity improvement is worth more, in tonnes of CO₂e, than the same improvement across a hundred smaller businesses combined.

The rollout has clearly been phased rather than all-at-once: one batch of sectors in October, a different batch in January. That pattern is worth watching, because it suggests BEE is bringing sectors in as their specific measurement methodologies get finalised, not all at once on a single fixed date. More notifications, covering more of India's PAT-era industrial base, look like a matter of when rather than if.

How the target actually works

CCTS doesn't tell a company "you may emit X tonnes." It tells a company: keep your emissions per unit of output (your Greenhouse Gas Emission Intensity, or GEI) under a set number. It's the same logic as a fuel-economy standard for a car: nobody caps how many kilometres you're allowed to drive, they cap how much fuel you burn per kilometre. Take a facility making 100,000 tonnes of product with 80,000 tonnes of associated CO₂e: its intensity is 0.8 tCO₂e per tonne. That ratio, not the raw tonnage, is what gets managed, targeted, and eventually traded.

Every target needs a starting point, and for the current cycle, that's FY 2023-24. The notified schedules record each entity's baseline output and baseline emission intensity from that year, and every subsequent number hangs off it: the target assigned to the entity, the GEI it eventually reports as achieved, and the surplus or shortfall that falls out of comparing the two.

That makes FY 2023-24 the single most consequential number in the entire framework, and also the easiest one to get quietly wrong. A baseline set even slightly too high (inflated production, understated emissions, a bad year used as the reference point) hands a company an artificially easy target for every compliance cycle that follows. Nobody has to falsify anything for that to happen; a rushed or poorly audited baseline submission does it on its own. It's the carbon-market equivalent of grade inflation: once the reference point is soft, every grade above it looks better than it should.

Earning a credit, or owing one

The formula is symmetric, and it's worth seeing both directions at once. Beat your target and you earn certificates worth (target minus achieved) times your output. A facility with a 0.80 tCO₂e/unit target that actually lands at 0.70, across 100,000 units of production, banks roughly 10,000 tCO₂e in certificates, real ones, sellable on the Indian Carbon Market. Miss the target by that same margin, and the identical formula, run in reverse, tells you how many certificates you now owe instead.

That's the whole economic engine in one sentence: over-performance creates supply, under-performance creates demand, and the price sits somewhere in between, a genuine market, not a fixed government fee. What's not simple is proving, to a regulator's satisfaction, exactly what your "achieved" number actually was. That's the part that decides whether a company's surplus is real money or a rejected filing.

What happens if you don't pay up

Ignore a shortfall and the framework doesn't shrug it off. If a company neither closes the gap nor submits the required certificates, BEE can impose environmental compensation priced at twice the average certificate price for that trading cycle, due within 90 days of the order. The 2x multiplier isn't arbitrary: it's set deliberately above the market rate, so that simply eating the penalty is always more expensive than actually buying certificates and complying. Miss the 90-day window too, and it escalates further under the Environment (Protection) Act, 1986. This is a regulatory obligation with teeth, not a market a company can quietly sit out when the numbers don't work in its favour.

An intensity target isn't an emissions cap

Here's the part that trips people up, and the part critics of intensity-based systems always reach for first: a company can hit its GEI target, earn certificates for it, and still emit more CO₂ than it did the year before. If a facility cuts its intensity from 1.0 to 0.8 tCO₂e per unit but doubles production in the same period, total emissions go up even as its performance, on paper, improves.

That's not a drafting error or a loophole someone will patch later. It's how every intensity-based system works, from fuel-economy rules to industrial benchmarking schemes elsewhere in the world. The trade-off is deliberate: an absolute cap can penalise a growing economy for growing, while an intensity target lets output rise as long as efficiency rises with it. Whether that's the right trade-off for a country still industrialising is a legitimate argument. What it means practically, for now, is that the number worth watching in any CCTS headline is efficiency per tonne, not the smokestack total, and that a "490 companies are cutting emissions" framing isn't quite the same claim as a "490 companies are cutting emissions intensity" one.

MRV is the real bottleneck

None of the above (the target, the formula, the penalty) means anything if the underlying numbers can't be trusted. That's the job of Measurement, Reporting and Verification: three separate, sequential checks that have to survive independent scrutiny before a certificate is worth anything.

• Measurement: fuel burned, energy consumed, process throughput, and the raw activity data a facility's emissions are calculated from.
• Reporting: that activity data converted into GHG emissions and GEI, using standard emission factors and Global Warming Potential values, submitted in a form a regulator can trace back to source records.
• Verification: an Accredited Carbon Verification Agency (ACVA), independent of the company, checks the submission and signs off before BEE will recognise it.

BEE's Detailed Procedure for CCTS runs this whole chain, and it currently covers just two of the recognised greenhouse gases, CO₂ and PFCs, with room built in to add more later. That's a narrower scope than it might sound: a facility with meaningful methane or nitrous oxide emissions is, for now, being measured on only part of its actual footprint.

Here's why this chain matters more than the target itself: every stage depends entirely on the one before it. A measurement error becomes a calculation error. A calculation error becomes a wrong GEI. A wrong GEI becomes a wrong comparison against the target. And a wrong comparison becomes a certificate that's either issued when it shouldn't have been, or a shortfall that's real but goes unrecognised. Nobody downstream, including the registry, the exchange, and the buyer paying for that certificate, has any way to independently re-check the physical measurement it was built on. They're trusting the chain, not the tonnes.

This is also where the digital layer comes in. Traditional MRV leans on field visits and periodic audits: someone shows up, checks meters and records, and signs a report that's accurate for exactly the day they were there. Digital MRV, or dMRV, adds satellite Earth observation, weather data, remote sensing, and machine learning on top, so instead of one snapshot a year, monitoring runs continuously and leaves a digital trail a verifier can actually interrogate.

It's not a replacement for the accredited verifier signing off on a facility's numbers. A satellite image, by itself, doesn't prove a carbon claim any more than a photograph proves a bank balance. What it does is give that verifier something closer to continuous evidence to check against, instead of a spreadsheet and a single site visit.

It matters even more once you look past the 490. The Offset Mechanism (CCTS's voluntary track) covers project types like forestry, agroforestry, and mangrove restoration, where the thing being measured is alive and constantly changing: canopy grows through a monsoon, a fire clears a hillside overnight, a boundary gets encroached on slowly enough that nobody notices for a year. An annual site visit can miss all of that. Continuous, satellite-backed evidence is much harder to fool, by accident or otherwise.

Compliance and Offset aren't the same market

Worth repeating, because the confusion is genuinely common: an industrial company under the Compliance Mechanism isn't automatically part of the Offset Mechanism, and a project developer earning offset credits isn't automatically an obligated entity. Different eligibility, different math, different governing rules; they only meet at the point where both produce a Carbon Credit Certificate.

Who actually runs this

CCTS isn't just a rulebook; someone has to operate it, day to day. BEE administers the whole framework, sets the methodologies, and keeps the register of accredited verifiers, the closest thing the scheme has to a referee. Grid-India, better known for balancing the electricity grid, runs the registry that certificates actually live in once issued. CERC, the power-sector regulator, oversees the trading itself. And the National Steering Committee for the Indian Carbon Market sets policy direction across both the compliance and offset tracks. Four institutions with very different day jobs, now running one connected carbon market, and per the Ministry of Power's latest reporting, all four pieces are operational, not still on paper.

Who this actually changes things for

For the 490 companies themselves, emissions intensity has just become a line item that shows up in a compliance filing, not just a sustainability report: a number with a formula, a deadline, and a price attached. For verification agencies, it means a growing, steady stream of facilities that need independently checked, which is either a capacity crunch or a business opportunity depending on which side of the audit you're on. For project developers on the Offset side, it means a genuine domestic buyer for their credits is starting to exist at scale, not just export-market demand. For technology and MRV providers, it's a straightforward signal: measurement tools that can hold up to independent verification are about to be worth a lot more than a dashboard that just looks good in a boardroom. And for regulators, the job now shifts from writing the rules to defending them, proving, notification after notification, that a bigger market doesn't mean a looser one.

Where this goes from here

490 is a snapshot, not a ceiling. More sectors and more entities look likely to get added as BEE builds out sector-specific methodologies and verification capacity. The questions that decide whether the market actually works don't change with scale, though: can emissions be measured the same way across every facility, regardless of who's checking? Can a baseline survive real scrutiny, not just a rubber stamp? Can a certificate be traced from issuance all the way to trade without a gap anyone can quietly exploit? Answering those consistently, at 490 companies and counting, is a bigger undertaking than writing the targets ever was.

“The market won't be judged by how many credits get issued. It'll be judged by whether anyone can trust the data behind them.”

Sources

• Government of India, Press Information Bureau: notification of GEI targets for 208 additional entities, confirming 490 obligated entities total.
• Ministry of Power, Annual Report 2025-26: status of the Indian Carbon Market and the 490-entity compliance mechanism.
• Bureau of Energy Efficiency, Detailed Procedure for the CCTS Compliance Mechanism: GHG coverage, GEI methodology, MRV requirements.
• Government of India Gazette: Carbon Credit Trading Scheme, 2023 (S.O. 2825(E)).
• Government of India Gazette: Greenhouse Gas Emission Intensity Target Rules, 2025: target-setting, CCC calculation, environmental-compensation provisions.
• Bureau of Energy Efficiency, Accredited Carbon Verification Agencies: current accreditation register.

CCTS rules and target schedules are still being amended as the market matures; check BEE and Ministry of Power notifications directly before treating any figure here as current.