India is proposing a market for carbon credits for electricity, steel, and cement

4 Aug 2022 , 11:49 AM

In an effort to speed up the switch to cleaner fuels, India intends to launch a carbon trading market for large polluters in the energy, steel, and cement sectors.

People with knowledge of the strategy predict that Prime Minister Narendra Modi would present the platform during the Independence Day festivities on August 15. According to those who wished to remain anonymous since the conversations are private, it has been in the works since March when consultation with ministries and businesses started.

Emails requesting a response from the Prime Minister's Office and the government think tank NITI Aayog were not immediately answered.

The sources stated that the market will first be restricted to difficult-to-abate industries, allowing participants to exchange credits obtained through reducing emissions. One of the objectives, according to the statement, is to guarantee that state-owned energy corporations including Oil & Natural Gas Corp., Indian Oil Corp., and NTPC Ltd., as well as steel and cement enterprises, may profit from planned investments in carbon-capture facilities.

India, the third-largest emitter in the world, shocked analysts by saying at the COP26 session in Glasgow late last year that it will reach net zero emissions by 2070. The South Asian economy is less developed and faces more climatic issues while being a decade behind fellow Asian juggernaut China. By 2030, the nation hopes to reduce its emissions by 1 billion tonnes as a first step toward achieving its objective.

The planned market in India is modeled after a comparable one in China, which introduced a required trading system for all big power plants last year. However, the market has only witnessed mediocre buying and selling of permits due to delays and issues with data collecting.

According to the sources, a thorough strategy for creating the carbon market should be available by the fourth quarter. As part of its climate ambitions, India is also aiming to develop additional carbon capture projects, promote the use of electric cars, and deploy methanol-blended fuels in land and maritime transportation, they claimed. The nearby Mint newspaper had earlier covered the carbon-market concept.