The CERC CCC Regulations 2026 – How India's Carbon Credit Trading Market Will Work on Power Exchanges

Introduction: The Rulebook for Carbon Trading

The Central Electricity Regulatory Commission (CERC) notified the Terms and Conditions for Purchase and Sale of Carbon Credit Certificates Regulations, 2026 on February 27, 2026. The regulations were published in the Official Gazette on March 3, 2026 under Section 178 read with Section 66 of the Electricity Act, 2003.

These regulations establish the operational framework for the trading of Carbon Credit Certificates (CCCs) in India under the Carbon Credit Trading Scheme (CCTS), 2023. They define the institutional setup, market structure, trading rules, and oversight mechanisms required to operationalize a regulated carbon market linked to the power sector.

The CCC Regulations, 2026 provide the operational framework for exchange-based trading of carbon credits in India and mark a key step in the implementation of the CCTS.

For any entity—whether obligated or non-obligated, buyer or seller, domestic or international—these regulations are the foundational rulebook for carbon credit trading in India. They translate the CCTS's structural design into enforceable trading rules, institutional obligations, and market safeguards.

This guide provides a comprehensive breakdown of the CERC CCC Regulations, 2026, and what they mean for your business.

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The Regulatory Journey: From CCTS to CCC Regulations

The Legislative Foundation

India's carbon market regulatory framework has evolved through multiple statutory interventions:

Year	Instrument	Significance
2001	Energy Conservation Act, 2001	Established BEE; no carbon trading provisions
2022	Energy Conservation (Amendment) Act, 2022	Empowered government to establish a national carbon market
2023	CCTS, 2023 (S.O. 2825(E))	Established institutional architecture
2026	CERC CCC Regulations, 2026	Enforceable trading rules

The Carbon Credit Trading Scheme, 2023

The CCTS was notified in 2023 to establish the legal framework for a national carbon market, supporting the country's transition to a low-carbon economy. The scheme has the objective of reducing, removing, or avoiding greenhouse gas emissions from the Indian economy by pricing such emissions through the trading of Carbon Credit Certificates (CCC).

The CCC Regulations, 2026

Notified on 27 February 2026 and published in the Official Gazette on 3 March 2026 under Section 178 read with Section 66 of the Electricity Act, 2003. These Regulations translate the CCTS's structural design into enforceable trading rules, institutional obligations, and market safeguards.

The Purpose of the Regulations

The regulations aim to create a structured and transparent market mechanism for trading carbon credits between obligated and non-obligated entities. They provide the necessary market architecture to ensure transparency, liquidity, and regulatory oversight in the trading of carbon credits.

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Key Definitions Under the CCC Regulations

Carbon Credit Certificate (CCC)

A CCC represents the reduction, removal, or avoidance of one metric tonne of carbon dioxide equivalent (1 tCO₂e) . Each CCC is:

• Serialised and tracked through the Registry
• Non-transferable except through the Registry
• Subject to retirement upon use for compliance or claims

Obligated Entities

Entities covered under the compliance mechanism of the CCTS with legally binding emission intensity targets. These are large industrial consumers across nine energy-intensive sectors.

Non-Obligated Entities

Entities not covered under the compliance mechanism but eligible to participate in the offset mechanism. Under the CCC Regulations, CCCs can be generated voluntarily under the offset mechanism.

Registry

The Grid Controller of India is designated as the Registry, acting as the central platform for CCC tracking and exchange.

Administrator

The Bureau of Energy Efficiency (BEE) is designated as the Administrator, responsible for designing transaction procedures, managing registration of entities, overseeing transfers and market operations, and ensuring compliance with relevant legislation.

Regulator

The Central Electricity Regulatory Commission (CERC) provides regulatory oversight, approves procedures, and ensures market integrity.

Floor Price and Forbearance Price

Term	Definition
Floor Price	The minimum price at which Carbon Credit Certificates shall be traded
Forbearance Price	The maximum price at which Carbon Credit Certificates shall be traded

Market

A platform where buyers and sellers buy or sell CCCs.

Power Exchange

A power exchange as defined in the CERC (Power Market) Regulations, 2021, including amendments and re-enactments thereof.

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The Institutional Framework

Registry: Grid Controller of India

The Grid Controller of India is designated as the Registry, acting as the central platform for CCC tracking and exchange. Its responsibilities include:

• Maintaining electronic accounts for all participants
• Verifying and authenticating transfers
• Recording legal ownership of CCCs
• Preventing double counting and double selling
• Ensuring transparency and accurate accounting

Administrator: Bureau of Energy Efficiency (BEE)

BEE is designated as the Administrator, responsible for:

• Formulating detailed transaction procedures
• Managing registration of entities
• Overseeing transfers and market operations
• Ensuring compliance with relevant legislation (Energy Conservation Act, Environment Protection Act)

Regulator: Central Electricity Regulatory Commission (CERC)

CERC provides regulatory oversight, approves procedures, and ensures market integrity. Its responsibilities include:

• Setting price bands (floor and forbearance prices)
• Overseeing market operations
• Intervening in cases of abnormal price movements
• Approving rules, business rules, and bye-laws of power exchanges

The Three Pillars

Institution	Role
Bureau of Energy Efficiency (BEE)	Administrator—designs procedures, manages registration, oversees transfers
Grid Controller of India	Registry—maintains electronic accounts, tracks CCCs
Central Electricity Regulatory Commission (CERC)	Regulator—sets price bands, oversees market operations

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The Compliance Market vs. The Offset Market

The regulations establish two distinct market segments:

The Compliance Market

Aspect	Details
Participants	Obligated entities from nine energy-intensive sectors
Purpose	Meeting regulatory emission intensity targets
Coverage	~490 entities across seven sectors, growing to nine
Price Controls	Floor and forbearance prices apply

The Offset Market

Aspect	Details
Participants	Non-obligated entities
Purpose	Voluntary participation, credit generation
Projects	Renewable energy, biogas, green hydrogen, afforestation, waste management
Price Controls	Market-determined

The Fungibility Principle

CCCs are defined uniformly across both markets, without distinction between compliance and offset certificates. This means CCCs generated under the offset mechanism can be used for compliance purposes, creating a single, integrated carbon market.

Why This Matters

The integration of compliance and offset markets enhances liquidity, improves price discovery, creates opportunities for non-obligated entities, and supports compliance for obligated entities.

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The Trading Infrastructure: Power Exchanges

Exclusive Trading Platform

The regulations mandate that CCCs shall be dealt with exclusively through power exchanges registered with the CERC. The recognised exchanges include:

• Indian Energy Exchange (IEX)
• Power Exchange India Limited (PXIL)
• Hindustan Power Exchange

Trading Frequency

Trading will occur on a monthly basis, as approved by CERC.

Participant Requirements

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

Prior CERC Approval

Power exchanges or other permitted entities must obtain prior CERC approval for rules, business rules, and bye-laws, including eligibility criteria, price discovery mechanism, and interaction processes with the registry.

The ICM Portal Integration

The Indian Carbon Market Portal, launched on March 21, 2026, handles entity registration, CCC issuance, MRV accreditation, and cross-border Article 6 crediting.

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Price Discovery and Market Controls

Market-Driven Pricing

Prices are determined through market-based price discovery on exchanges.

Regulatory Price Bands

The Commission may define:

• Floor prices: Minimum trading price
• Forbearance prices: Maximum trading price

Regulatory Intervention

In cases of abnormal price movements or volatility, the Commission can issue directives to stabilise the market.

Why Price Controls Matter

Price bands prevent excessive volatility, ensure market stability, protect participants from manipulation, and provide price certainty for business planning.

The Role of Price Discovery

Credible price discovery is essential for the market's success. As the IEEFA notes, "getting the price signal right early is key to the credibility of India's carbon market".

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Trading Rules and Market Safeguards

Key Safeguards

Safeguard	Description
No Overselling	Entities cannot sell more CCCs than they hold
Real-Time Cross-Checks	Registry performs real-time cross-checks on transactions
Non-Compliance Action	Transactions become void; entities may be flagged as defaulters
Market Suspension	Repeated defaults can lead to market suspension (up to 6 months)

The "No Overselling" Rule

This is the most critical market integrity safeguard. Entities cannot place sale bids for more certificates than what is available in their Registry accounts. This prevents:

• Double selling: Selling the same credits on multiple exchanges
• Over-selling: Selling more credits than held
• Market manipulation: Creating false demand signals

Consequences of Default

Entities may be flagged as defaulters. In case an obligated entity fails to comply, the Central Pollution Control Board will impose penalties for the shortfall in the respective compliance year equal to twice the average price at which CCCs traded during the trading cycle of that compliance year.

Banking and Borrowing

Feature	Rule
Banking	Unlimited
Borrowing	Not allowed

The Power Exchange Reporting Obligation

Power exchanges must:

1. Send reports for executed transactions, financial obligation, and all other relevant reports to the respective entities
2. Report to the Registry, after every dealing session, details of the CCCs transacted by the eligible entities

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Settlement, Reporting, and Registry Operations

Settlement Process

Upon successful transactions:

• Seller accounts are debited
• Buyer accounts are credited

Reporting Requirements

Power Exchanges must:

• Report transaction data to the Registry
• Provide financial and operational reports to relevant authorities

Registry Operations

The Registry ensures:

• Transparency
• Accurate accounting
• Prevention of double counting

Monthly Trading Cycles

The framework includes provisions for:

• Monthly trading cycles
• Registry reconciliation
• Transaction reporting
• Market oversight

The Legal Framework

The CCC Regulations, 2026 provide the operational framework for the exchange of CCCs, including settlement and reconciliation procedures.

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Banking, Validity, and Use of CCCs

Banking Rules

Unlimited banking of CCCs is allowed. Entities can:

• Hold CCCs indefinitely
• Use them for future compliance
• Sell them at any time

Borrowing

Borrowing is not allowed. Entities cannot borrow CCCs to meet current compliance obligations.

Validity and Lifecycle

The validity and lifecycle of CCCs are governed by the CCTS 2023 compliance and offset mechanisms.

Surrender Rules

Surrender rules are governed by CCTS 2023 compliance and offset mechanisms.

The Legal Status of CCCs

CCCs are:

• Property: CCCs are legal property that can be bought, sold, and transferred
• Intangible: CCCs are intangible assets, not physical commodities
• Regulated: CCCs are subject to CERC regulations and oversight

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Implications for Businesses

For Obligated Entities (Buyers)

Implication	What You Need to Do
Compliance obligation	Meet your emission intensity target
Credit procurement	Buy CCCs through Power Exchanges if you have a shortfall
Registry registration	Register with Grid Controller of India
Exchange registration	Register with IEX, PXIL, or Hindustan Power Exchange
Compliance monitoring	Track your compliance position
Penalty avoidance	Meet targets or procure credits early

For Non-Obligated Entities (Sellers)

Implication	What You Need to Do
Project registration	Register your project with CR-I
Credit generation	Generate CCCs through eligible projects
Registry registration	Register with Grid Controller of India
Exchange registration	Register with a Power Exchange
Market participation	Sell CCCs on Power Exchanges

For Brokers

Implication	What You Need to Do
Participant registration	Register with Power Exchanges
Registry account	Open a Registry account
Compliance	Ensure all transactions comply with CCC Regulations
Due diligence	Verify credit quality and registry status
Safeguard compliance	Ensure no over-selling or defaults

The Registration Imperative

Until you complete carbon credit registration on the ICM portal, you cannot submit compliance documents or manage your Carbon Credit Certificates. For a notified obligated entity, registration on the ICM portal is mandatory.

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The CERC's Regulatory Role

The CERC's Mandate

The CERC's regulatory role under the CCC Regulations includes:

Function	Description
Price Band Setting	Defining floor and forbearance prices
Market Oversight	Monitoring market operations for integrity
Abnormal Price Intervention	Issuing directives to stabilise markets
Rule Approval	Approving rules, business rules, and bye-laws of power exchanges

The Importance of Regulatory Oversight

Carbon markets need strong governance to work properly. Without clear rules, trusted oversight, and proper measurement systems, trading can lose credibility.

The CERC's Experience

CERC already regulates power exchanges and has established experience with commodity trading, which it now extends to carbon credit trading.

The Framework's Purpose

The regulations provide the necessary market architecture to ensure transparency, liquidity, and regulatory oversight in the trading of carbon credits.

Conclusion: Know the Rules, Play the Game

The CERC CCC Regulations, 2026 are the rulebook for carbon credit trading in India. Understanding and complying with these regulations is essential for any participant in the Indian carbon market.

Key Takeaways

Aspect	What You Need to Know
Regulations Notified	February 27, 2026
Published	March 3, 2026
Administrator	Bureau of Energy Efficiency (BEE)
Registry	Grid Controller of India
Regulator	Central Electricity Regulatory Commission (CERC)
Trading Platform	Power Exchanges (IEX, PXIL, Hindustan Power Exchange)
Trading Frequency	Monthly
Penalty	Market suspension of up to 6 months for repeated defaults
Price Controls	Floor and forbearance prices
Market Segments	Compliance and Offset
Fungibility	Yes—CCCs are uniformly defined
Banking	Unlimited
Borrowing	Not allowed

The Choice Is Yours

Option	Outcome
Understand and comply	Navigate the market confidently, avoid penalties, capitalise on opportunities
Ignore or misunderstand	Risk penalties, lost opportunities, reputational damage