How to earn and sell carbon credits in India: the offset mechanism step by step

India's Carbon Credit Trading Scheme has two routes to carbon credit certificates. Plants in the obligated sectors earn them by beating their intensity targets. Everyone else — renewable developers, manufacturers, farmers' organisations, municipal bodies — can earn them through the offset mechanism, by registering a project that reduces, removes or avoids emissions.¹ This guide walks through the steps.

Who can earn credits through offsets

Entities that are not obligated under the compliance mechanism can register projects.¹ Secondary guidance on the procedures states that projects must start on or after 1 January 2025, must not be registered with another carbon market at the same time, and must show additionality — reductions that would not have happened anyway.²

Step 1: Check there is an approved methodology

A project can only be registered under a methodology approved for the Indian carbon market. The Bureau of Energy Efficiency has approved methodologies for, among others, grid-connected renewable energy, green hydrogen, industrial energy efficiency and fuel switching, landfill methane, manure methane, and afforestation and reforestation, including mangroves.^{2 3} More are expected; check the published list, and see India's Carbon Credit Trading Scheme for the scheme as a whole.

Step 2: Prepare the project design document

The project design document (PDD) sets out the methodology applied, the baseline, the expected reductions, the monitoring plan and the crediting period.² The baseline and the monitoring plan decide how many certificates the project can later claim, so they deserve the most care.

Step 3: Validation

An accredited carbon verification agency validates the PDD against the methodology.²

Step 4: Registration

The validated project is registered through the Indian Carbon Market portal, with review by the Bureau of Energy Efficiency, which administers the scheme.^{1 2}

Step 5: Implement and monitor

Run the project and measure it as the monitoring plan says — typically meter readings, fuel and production records, and evidence for each.²

Step 6: Verification

An accredited verification agency verifies the reductions achieved over the monitoring period.²

Step 7: Issuance

Carbon credit certificates are issued by the Bureau of Energy Efficiency into the project's account in the registry, operated by the Grid Controller of India.^{1 2}

Step 8: Sale

Certificates are traded on the power exchanges, regulated by the Central Electricity Regulatory Commission.^{1 2} The first trading of certificates was expected in 2026;⁴ check the exchanges for the current state of the market.

What makes a project credible

• Measured data with evidence: meter readings, invoices, production logs — kept from the start date.
• A conservative baseline that a verifier can follow.
• No double counting: one registry, one claim.
• Clear ownership of the reductions, agreed in contracts with landowners, offtakers or partners.

Frequently asked questions

Can an obligated plant use offset credits?

Not to meet its target: under the scheme's rules, offsets are not allowed for compliance.¹ An obligated plant earns certificates by beating its own target.

Can a project registered with an international registry also earn Indian certificates?

Not at the same time: a project cannot be registered with another carbon market concurrently.²

How long does it take?

Validation, registration, a monitoring period and verification all come before issuance, so the first certificates typically arrive a year or more after the project starts.

How ESGTrack helps

ESGTrack does not register projects. It keeps the measured data a project depends on — readings, fuel and production records, by site and month, each with its evidence and approvals — and calculates the emissions behind a baseline and the reductions achieved. For obligated plants, its compliance module tracks targets and the certificate position. See carbon accounting or book a demo.