The United Kingdom has included India’s Carbon Credit Trading Scheme (CCTS) in its indicative list of carbon pricing mechanisms.
The scheme was found to meet the eligibility requirements under Part 3, Regulation 6 of the Carbon Border Adjustment Mechanism (Calculation of CBAM Rate and Determination of Carbon Price Relief) Regulations 2026. The United Kingdom has formally recognised India’s Carbon Credit Trading Scheme (CCTS) under its indicative list of overseas carbon pricing mechanisms that could qualify for relief under the UK’s Carbon Border Adjustment Mechanism (CBAM). Under the recognition, UK importers of eligible Indian goods covered by CBAM can claim relief for the carbon price already paid on those goods under India’s CCTS. The relief will be subject to evidence and verification requirements under UK law. The amount of relief will depend on the effective carbon price paid on the goods in India. The move could help prevent carbon costs from being imposed twice on the same goods — once in India and again under the UK’s CBAM.
India notified the CCTS as a market-based mechanism to reduce, remove or avoid greenhouse gas emissions by putting a price on emissions through the trading of Carbon Credit Certificates.
The UK decided in December 2023 to introduce its CBAM from 2027.
The decision is consistent with the UK CBAM’s principle of avoiding double taxation on goods that have already been subject to an eligible carbon price in their country of origin, according to ministry sources. The UK’s recognition follows technical discussions between the commerce ministry and its UK counterpart on the design and implementation of the CCTS. The mechanism will impose a carbon-related charge on imports of certain emissions-intensive products, including iron and steel, aluminium, fertiliser, hydrogen, ceramics, glass and cement.