What is an obligated entity under CCTS?
An obligated entity under India's Carbon Credit Trading Scheme is an industrial plant in a notified sector that has been given a binding greenhouse gas emission intensity target by the Ministry of Environment, Forest and Climate Change. The target is set as emissions per unit of output — tonnes of carbon dioxide equivalent per tonne of cement, of aluminium, of paper — and not as an absolute quantity of emissions the plant may release.
That distinction shapes everything else about the scheme. Because a CCTS target is an intensity target, a plant that doubles its production and holds its emissions per tonne steady has met its obligation, even though its absolute emissions rose. The design deliberately does not constrain industrial growth; it constrains the carbon cost of each unit of that growth.
Which sectors are covered by the CCTS compliance mechanism?
Nine hard-to-abate industrial sectors are identified under the CCTS compliance mechanism. These are the sectors where emissions are driven by process chemistry and high-temperature heat rather than by electricity use alone, which is why they are difficult to decarbonise by switching power supply.
- Aluminium
- Cement
- Chlor-alkali
- Pulp and paper
- Iron and steel
- Fertiliser
- Petroleum refining
- Petrochemicals
- Textiles
Being named as a sector is not the same as holding a target. Targets are notified plant by plant, in phases, and a sector can be identified under the scheme before its installations have received final numbers.
How many plants hold binding targets, and when were they notified?
Published counts of CCTS coverage differ, and it is worth understanding why before quoting a number. The International Carbon Action Partnership's CCTS factsheet gives 490 covered entities across seven sectors as of February 2026. Its reporting on the target notifications themselves totals roughly 740 plants across the two phases. Both come from the same organisation, and neither is wrong.
| Notified | Sectors | Plants |
|---|---|---|
| 8 October 2025 | Aluminium, cement, chlor-alkali, pulp and paper | 282 |
| 16 January 2026 | Petroleum refining, petrochemicals, textiles | ~460 |
| Pending at that date | Iron and steel, fertiliser | Targets not yet final |
The gap is a counting question, not a factual dispute: a notification announces targets for plants, an entity may operate more than one plant, and coverage is revised as phases are finalised. Iron and steel is among the largest emitting sectors on the list — the Council on Energy, Environment and Water estimates CCTS-covered emissions in iron and steel alone at 349.5 MtCO₂e — so coverage will change materially again when its targets are notified. Treat any total for the Indian Carbon Market as a figure with a date and a source attached to it.
How were the targets set?
Targets were set under the Greenhouse Gases Emission Intensity Target Rules, 2025, notified by the Ministry of Environment, Forest and Climate Change, using financial year 2023-24 as the baseline period. Each obligated plant's target is expressed relative to its own measured baseline intensity rather than to a single sector-wide benchmark.
- Baseline period: financial year 2023-24.
- First compliance years: FY 2025-26 and FY 2026-27.
- Compliance obligations took effect from 1 April 2025, the start of FY 2025-26.
- Targets are set annually within multi-year compliance periods rather than as a single end-date figure.
Setting each target against a plant's own baseline means two plants making the same product can hold different absolute intensity targets. The scheme asks each installation to improve on itself, which is more forgiving of legacy plant design than a common benchmark would be, and correspondingly more demanding of accurate baseline measurement.
What happens if a plant beats or misses its target?
A plant whose emission intensity falls below its notified target for a compliance year is entitled to Carbon Credit Certificates, one for each tonne of carbon dioxide equivalent of eligible reduction. A plant that exceeds its target must acquire and surrender an equivalent number of certificates to close the gap.
This is what makes the compliance mechanism a market rather than a set of fines: the obligation can be met either by abating emissions at the plant or by buying the abatement someone else achieved. What both routes have in common is that the underlying reduction has to be measured, reported and independently verified before any certificate exists at all — see the CCTS overview for how verification sits in the issuance process.
What does this mean for a project developer rather than an obligated plant?
If you are developing a forestry, agroforestry or blue carbon project, you are not an obligated entity. Obligation under CCTS attaches to industrial installations in the notified sectors; land-based projects interact with the scheme through the offset mechanism instead, which is open to non-obligated entities on a voluntary basis.
The compliance side still matters to a project developer, because it is what creates domestic demand for credits. Roughly 740 plants holding binding intensity targets is the demand-side context in which an Indian offset project is developed. For what project development involves in practice, see digital MRV in India and the carbon project development pipeline.