India’s carbon market framework continues to evolve with the Central Electricity Regulatory Commission (CERC) notifying the Terms and Conditions for Purchase and Sale of Carbon Credit Certificates Regulations, 2026. While the broader Carbon Credit Trading Scheme (CCTS) has been under development for some time, these regulations provide important clarity on how carbon credit certificates (CCCs) will be traded in the market. For participants across the energy sector—including industries under energy efficiency programs like the PAT scheme, renewable developers, and compliance entities—this update marks another step toward operationalizing India’s carbon market. What the New Regulations Clarify The regulations outline the operational framework for the purchase and sale of Carbon Credit Certificates (CCCs). Some of the key provisions include: Carbon Credit Certificates represent one tonne of carbon dioxide equivalent (tCO₂e). Carbon credit transactions will be conducted through power exchanges. Bureau of Energy Efficiency (BEE) will act as the administrator for issuing and managing CCCs. Two market segments will exist: Compliance market for obligated entities Offset market for voluntary participants Entities participating in carbon credit trading will need to register with the power exchange. Another important aspect is that price discovery will be carried out through the exchange platform, subject to regulatory oversight from CERC. Role of Power Exchanges Power exchanges such as PXIL and IEX are expected to play a key role in facilitating carbon credit trading. India already has experience with market-based environmental instruments such as: Renewable Energy Certificates (RECs) Energy Saving Certificates (ESCerts) under the PAT scheme With carbon credits becoming a tradable instrument, exchanges will provide the infrastructure for transparent trading, price discovery, and settlement. Implications for Industries Under PAT For industries participating in the Perform, Achieve and Trade (PAT) scheme, the development is particularly relevant. PAT already incentivizes energy efficiency improvements through ESCert trading. The emergence of a carbon credit market could create additional avenues where emission reductions may translate into tradable value. While the mechanisms remain distinct, the broader direction suggests that India is gradually building an integrated market ecosystem for environmental attributes. The Bigger Picture India’s move toward a structured carbon trading system reflects a broader global trend where market mechanisms are used to drive emission reductions. For companies operating in energy-intensive sectors, understanding how these instruments evolve—whether ESCerts, RECs, or Carbon Credit Certificates—will become increasingly important in shaping long-term compliance and sustainability strategies.