The Central Electricity Regulatory Commission (CERC) Regulations, 2026 establish the operational framework for the trading of Carbon Credit Certificates (CCCs) in India under the Carbon Credit Trading Scheme (CCTS), 2023. These regulations define the institutional setup, market structure, trading rules, and oversight mechanisms required to operationalize a regulated carbon market linked to the power sector, enabling both compliance and voluntary participation.

Institutional Framework and Governance
• Registry: Managed by the Grid Controller of India, acting as the central platform for CCC tracking and exchange.
• Bureau of Energy Efficiency (designated as Administrator): Responsible for designing transaction procedures, managing registration of entities, overseeing transfers and market operations and ensuring compliance with relevant legislation (Energy Conservation Act, Environment Protection Act)
• CERC: Provides regulatory oversight, approves procedures, and ensures market integrity.

Market Structure
• Two distinct market segments: a compliance market for obligated entities and an offset market for non-obligated entities.
• CCCs can be traded primarily through power exchanges or other mechanisms approved by the Commission.
• Trading occurs on a periodic basis (e.g., monthly) as defined by approved procedures.

Participation and Registration
• All participants must:
- Register with the Registry and/or Power Exchanges.
- Hold CCCs in registry accounts prior to trading.
• Both obligated and voluntary entities are eligible to participate, subject to compliance with rules and procedures.

Carbon Credit Certificates (CCCs) – Nature and Categorization
• CCCs represent 1 tCO₂e of emissions reduction, removal, or avoidance.
• Categorized based on obligated and non-obligated entities, potential additional categories as approved by the Commission
• Issuance requires:
- Government approval
- Payment of applicable fees
- Registration in the central registry

Trading Rules and Market Functioning
• CCCs must be traded exclusively through authorized platforms unless otherwise permitted.
• Key safeguards:
- Entities cannot sell more CCCs than they hold (no overselling).
- Registry performs real-time cross-checks on transactions.
• In case of non-compliance:
- Transactions become void.
- Entities may be flagged as defaulters.
- Repeated defaults can lead to market suspension (up to 6 months).

Pricing Mechanism
• Prices are determined through market-based price discovery on exchanges.
• The Commission may define floor prices and forbearance prices (compliance market)
• In cases of abnormal price movements or volatility, the Commission can issue directives to stabilize the market.

Settlement, Reporting, and Registry Operations
• Upon successful transactions, seller accounts are debited and buyer accounts are credited.
• Power Exchanges must report transaction data to the Registry and provide financial and operational reports to relevant authorities.
• The Registry ensures transparency, accurate accounting and prevention of double counting

Banking, Validity, and Use of CCCs
• Banking and surrender rules are governed by CCTS 2023 compliance and offset mechanisms.
• Validity and lifecycle of CCCs are defined under detailed procedures aligned with the scheme.

Fees and Financial Provisions
• The Commission may determine fees payable by market participants.
• Fees contribute to registry operation and market infrastructure and administration

Market Oversight and Compliance
The Commission, supported by the Bureau, has the following responsibilities:
• Monitors market behavior.
• Ensures transparency and integrity.
• Enforces compliance with regulatory provisions.

Validation and Verification Body
N/A

Recognition of methodologies by regulation
N/A

Registration of the PD or project with the national registry for VCM and Article 6
The entities buying and selling the CCC for VCM must register with the registry

Approval for listing, issuance, trade, authorisation and corresponding adjustment
N/A

Transfer of credits to registry after issuance and CA
CCCs must be credited to the CCC Registry upon payment of fees before they can be placed for dealing/trading.

Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026.

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Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

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Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

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Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector provides communication services, software development, and IT solutions.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Procedural justice means ensuring that decision making is safe, transparent and inclusive, emphasizing the agency and influence of vulnerable groups and those most impacted.

Central Electricity Regulatory Commission (Terms and Conditions for Purchase and Sale of Carbon Credit Certificates) Regulations, 2026.

Policy instrument

Climate justice

Greenhouse gas

Economic sector

Finance