India notified its domestic Carbon Credit Trading Scheme (CCTS) in June 2023. However, the operationalisation of the CCTS required an elaboration of procedures, including the specification of obligated sectors, trajectories, and targets. The publication of the ‘Draft Detailed Procedure for Compliance Mechanism Under the CCTS’ is a step in this direction. The formalisation of the draft procedure should provide greater clarity with regard to the implementation of the CCTS.
The draft procedure contains text that suggests that renewable energy certificates (RECs) will be excluded from the CCTS. If finalised, how would this provision affect the existing market for RECs?
What kind of enforcement mechanisms will be specified for obligated entities and how effective would these be in ensuring compliance?