インドは製品1トンあたりで炭素に値段をつけた。総排出量は増えうる

Every carbon market has to answer one question before it answers any other. What exactly is being capped?

The European Union, South Korea and now Japan all answer it the same way. They cap tonnes. An installation receives an allowance to emit a quantity of greenhouse gas, and if it emits more than that quantity it buys the difference. The number on the certificate is absolute.

India caps a ratio instead.

India assigns targets in tonnes of CO2 per tonne of product

The Carbon Credit Trading Scheme was notified in 2023 under clause (w) of section 14 of the Energy Conservation (Amendment) Act, 2022. It runs two mechanisms: a compliance mechanism for large industrial emitters, and a voluntary offset mechanism for everyone else.

In the compliance mechanism, obligated entities are assigned what India’s own government presentation calls “GHG Emissions Intensity Targets,” and it gives the unit: tCO2 per tonne. The target covers scope 1 and scope 2, so purchased electricity is inside the boundary. The entity is not told how much it may emit. It is told how much it may emit for each tonne of cement, aluminium, paper or refined product it makes.

The targets arrived in two batches. On 8 October 2025, targets were published for primary aluminium, cement, chlor-alkali, and pulp and paper, covering 282 obligated entities. On 13 January 2026, targets followed for secondary aluminium, petrochemicals, petroleum refining and textiles, covering a further 208. That is roughly 490 entities now carrying a legally binding intensity target, and the International Carbon Action Partnership counts seven sectors in force.

The compliance years are 2025-26 and 2026-27, measured against a fiscal 2023-24 baseline. ICAP puts the first compliance date at 31 July for the 2025-26 year. An entity that comes in under its target is eligible for Carbon Credit Certificates, which trade on India’s power exchanges. An entity that comes in over its target has to buy certificates and surrender them.

Oversight sits with the National Steering Committee for the Indian Carbon Market. The registry and portal that will record all of this are still being built.

An intensity target can be met while absolute emissions rise

Take a plant that emits 1.0 tonne of CO2 per tonne of product and makes a million tonnes a year. Its absolute emissions are a million tonnes. Give it a target of 0.9 and a year in which demand grows 20%. It invests, hits 0.88, and beats its target comfortably enough to be issued certificates it can sell. Its absolute emissions that year are 1.056 million tonnes.

The plant has complied. The regulator’s objective has been met, because the regulator’s objective was stated in intensity. India’s emissions from that plant went up.

In an absolute cap, this cannot happen without someone buying allowances from someone else who cut. The cap binds the total and the market decides where the cuts happen. An intensity target binds the ratio and leaves the total to demand.

The design follows India’s NDC, which is also an intensity target

India’s Nationally Determined Contribution has always been expressed as emissions intensity of GDP, not as an absolute cap. The original 2015 pledge was a 33% to 35% reduction from 2005 levels by 2030. The country reported a 36% reduction between 2005 and 2020, hitting the original target eleven years early, and the pledge was raised to 45% in 2022 and to 47% for the 2031 to 2035 period in March 2026.

A country that has committed to an intensity path and expects its industrial output to grow is being internally consistent when it builds an intensity market underneath. The alternative, an absolute cap set during rapid industrialisation, is a cap on growth, and no government that needs the growth is going to sign it.

Your scope 3 number is absolute

If an Indian aluminium smelter or petrochemical plant is in your supply chain, its emissions reach you as scope 3 category 1. Scope 3 is counted in tonnes. The emissions you report are the product of an intensity factor and a volume, and you buy the volume.

A supplier that writes to you saying it met its CCTS target has told you something real and something limited. It has told you its emissions per tonne fell. It has not told you that the tonnes you are responsible for fell, and if you bought more from them this year, they almost certainly did not.

That gap changes how you write the clause. A procurement contract that requires a supplier to be “CCTS compliant” has bought you an intensity commitment. A procurement contract that wants your scope 3 number to fall has to say so in absolute terms, or has to fix the intensity factor and let you control the volume yourself. These are different asks and the second one costs the supplier more.

The same distinction applies to how you read the certificates. A Carbon Credit Certificate issued under the compliance mechanism represents outperformance against an intensity target. It is not a tonne removed from the atmosphere, and nothing in the scheme claims it is. The offset mechanism, which is voluntary and project-based, is where India issues credits for reductions and removals, across ten sectors with eight methodologies published so far.

Two of the heaviest sectors still have no targets

Iron and steel and fertilizer are inside the scheme’s scope and their final targets have not been published. Those are two of the most emissions-intensive industries India has, and until their numbers land, any claim about what the scheme will do to Indian industrial emissions is a forecast about the part that has not been written.

A supplier in a notified sector has a target this year. A steel supplier does not yet, and a contract that assumes otherwise is assuming a notification date nobody has announced.

Japan and Korea have already signed cooperative agreements with India

India has signed Memoranda of Cooperation for bilateral cooperative approaches under Article 6.2 of the Paris Agreement with Japan and the Republic of Korea. Negotiations on the rules and guidelines for implementing those approaches are ongoing. India has published a list of thirteen activities to be considered under Article 6.2 and thirteen under Article 6.4, and has received 650 project concept notes for Article 6.4 host-party review.

Those rules decide whether a Japanese or Korean buyer can count an Indian mitigation project towards its own obligation, and they are not written yet. A company evaluating an Indian project under a cooperative approach is evaluating a unit that has to survive corresponding adjustment and the buyer’s own absolute accounting, not an intensity ratio.

India set all of this out on 22 April 2026 in Yeosu, Republic of Korea, at a regional carbon pricing dialogue for Northeast and Southeast Asia. Officials from across the region were in the room while it was presented.

What to take from this

India’s compliance carbon market now covers roughly 490 obligated entities across seven sectors, and it is built on a different unit from the ones your reporting team is used to.

Ask a supplier for intensity and volume, not intensity alone. Read a CCTS compliance claim as a statement about a ratio. Treat iron and steel coverage as pending rather than assumed. And if you are looking at Indian mitigation projects through Article 6, look at what the unit becomes after corresponding adjustment, not what it was called when it was issued.

Tech for Impact Summit 2027 takes place on 18 and 19 May 2027 in Tokyo, co-hosted by the United Nations University. It is invitation-only, and the conversations at it tend to be exactly this kind: how a rule written in one jurisdiction lands on a balance sheet in another. If you are working on cross-border carbon accounting, supply-chain decarbonisation, or industrial transition in Asia, you can join the waitlist at tech4impactsummit.com/apply.

Related reading: Japan’s GX-ETS allocation and benchmarking, Korea’s Phase 4 benchmark tightening, and the CBAM reckoning facing Japan, Korea and ASEAN.