Cement Manufacturers Association (CMA)

29 India's Carbon Trading Scheme and the Cement Industry A Data-Driven Assessment Mrinmoy Chakraborty M.Sc. Applied Geology | PG Diploma in Environmental Law (NLSIU) 05 Abstract India is preparing to operationalise its Carbon Credit Trading Scheme (CCTS) under the Indian Carbon Market (ICM) framework, with formal compliance obligations expected from June 2026. Embedded within the Energy Conservation (Amendment) Act 2022 and administered by the Bureau of Energy Efficiency (BEE), the CCTS introduces Greenhouse Gas Emission Intensity (GEI) benchmarks for eight energy- intensive industrial sectors, including cement — a sector responsible for approximately 5–7% of India's total Co emissions and producing 400–420 2 million tonnes of cementitious material annually. This paper presents a data-driven assessment of the CCTS design, its sectoral architecture, and its specific implications for the Indian cement industry. Drawing on publicly available regulatory notifications, energy-efficiency literature, and international carbon-market analogues, the paper evaluates emission intensity targets for FY 2025–26 and FY 2026–27, estimates sector-level Carbon Credit Certificate (CCC) demand and financial exposure, and characterises a plausible CCC price trajectory for the period 2026–2035. Key findings indicate that the cement sector faces a CCC cost burden in the range of USD 50–130 million over the first two compliance years under a conservative USD 10/tCO e price assumption, with differentiated 2 exposure across plants depending on clinker- to-cement ratio, alternative fuel use, and kiln efficiency. The paper contextualises these findings within the international experience of the EU Emissions Trading System (EU ETS) and China's national carbon market, and concludes with a forward-looking discussion of constraints, opportunities, and technology pathways for deep decarbonisation of the Indian cement sector. Keywords: Carbon Credit Trading Scheme; Indian Carbon Market; Cement Decarbonisation; Greenhouse Gas Emission Intensity; PAT Scheme; Carbon Price; EU ETS; Net-Zero Strategy 1. Introduction India is preparing to launch its Carbon Credit Trading Scheme (CCTS) around June 2026, establishing the Indian Carbon Market (ICM) as a compliance-based instrument for reducing greenhouse gas (GHG) emissions. The CCTS creates a market for Carbon Credit Certificates (CCC), each representing 1 tonne of CO ₂ equivalent (tCO ₂ e) abated, avoided, or removed through a verified mitigation activity.[1]