Cement Manufacturers Association (CMA)

68 Diagram 1: CCTS compliance logic The Government of India's CCTS is intended to create an enforceable carbon market where regulated entities must meet emissions- intensity targets. For cement, the scheme shifts the compliance focus from energy use to greenhouse gas intensity, thereby encouraging fuel switching, process innovation, and the use of low-carbon inputs. The system is closely linked to India's broader net-zero trajectory and the industrial decarbonisation agenda prepared by NITI Aayog. 2. Policy Framework The legal basis for CCTS comes from the Energy Conservation (Amendment) Act, 2022, which enabled the creation of an Indian carbon market and the issuance of carbon credit certificates. The scheme was notified in 2023, detailed compliance procedures were issued in 2024, and sectoral targets for major industries were progressively notified in 2025 and 2026. The framework is administered by the Bureau of Energy Efficiency, with governance support from the National Steering Committee for the Indian Carbon Market. CCTS is an intensity-based baseline-and-credit mechanism, not an absolute cap-and-trade system. This distinction matters for cement because production growth is expected to continue, and the scheme therefore rewards emissions reduction per tonne of product rather than requiring an absolute emissions ceiling. For cement units, the notified compliance mechanism covers both integrated plants and grinding units, with emissions measured on a gate-to-gate basis. Table 1: CCTS elements relevant to cement 1. SECTOR TARGET SET BY GOI 2. PLANT-LEVEL EMISSIONS MONITORED 3. THIRD-PARTY VERIFICATION 4. ACTUAL INTENSITY COMPARED WITH TARGET 5A. BELOW TARGET CARBON CREDITS ISSUED 5B. ABOVE TARGET CREDITS PURCHASED/ COMPENSATION PAYABLE 6. TRADING THROUGH DESIGNATED EXCHANGES 2 Component Cement sector implication Legal basis Energy Conservation (Amendment) Act, 2022 Scheme type Intensity-based baseline-and-credit Coverage Cement among first covered sectors Metric tCO2e per unit of cement output Compliance Credits issued for overperformance; surrender required for shortfall