New Delhi: The government has approved the Detailed Procedure for the Offset Mechanism and eight different methodologies under the mechanism for the Indian Carbon Market (ICM), said the Ministry of Power in a statement on Friday. "This marks a major step forward in the operationalisation of the Offset Mechanism under ICM," said the statement.
"Towards India’s commitment on emission intensity reduction, Government of India has already notified The Carbon Credit Trading Scheme, 2023 in June 2023, and laid the foundation for the Indian Carbon Market (ICM) by establishing the institutional framework, including the National Steering Committee for Indian Carbon Market (NSCICM). In December 2023, the scheme was amended to introduce the Offset Mechanism, enabling participation from non-obligated entities through voluntary climate mitigation projects," said the statement.
The Offset Mechanism will encourage voluntary participation by entities for developing projects that reduce, remove, or avoid greenhouse gas (GHG) emissions. This framework enables businesses, industries, and organisations — particularly those not covered under the compliance mechanism — to participate in climate action and receive carbon credits for verified emission reductions. "This mechanism will enable our country to tap climate change mitigation from sectors not covered under the compliance mechanism and can incentivise actions in such sectors," said the Power Ministry.
Eight methodologies under Offset Mechanism include methodologies for renewable energy (including Hydro and Pumped storage), green hydrogen production, industrial energy efficiency, landfill methane recovery, and mangrove afforestation and reforestation. These methodologies are expected to support a wide range of climate-friendly projects for voluntary carbon credit generation.