On 12-10-2023, the Ministry of Environment, Forest and Climate Change notified the Green Credit Rules, 2023 to leverage a competitive market-based approach for green credit for incentivizing environmental actions of various stakeholders. The provisions came into force on 12-10-2023.
Key Points:
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Objective-
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incentivize environmental positive actions through market-based mechanism and generate green credit, which will be tradable and made available for trading on a domestic market platform.
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To encourage industries, companies and other entities to meet their existing obligations, and encourage other persons and entities, to undertake voluntary environmental measures by generating or buying green credit.
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Green Credit Programme- The measures that can be taken up for protection, preservation or coversation of the environment are:
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Tree plantation;
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Water management;
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Sustainable development;
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Waste management;
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Air pollution reduction;
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Mangrove conservation and restoration;
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Eco mark label development; and
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Sustainable building and infrastructure.
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Methodology of generating green credit: calculation of green credit will be based on equivalence of resource requirement, parity of scale, scope, size and other relevant parameters required to achieve the desired environmental outcome.
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Procedure: The Administrator will determine the following and develop a website for the same:
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Evaluation and verification of activities undertaken;
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Manner of registration and details required for registration;
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Responsibilities of Administrator: The Administrator will have to develop the guidelines for the following with approval of the Central Government:
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effective implementation of the Green Credit programme
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develop guidelines, processes and procedures
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develop and establish methodologies, registration process, guidelines and associated measurement, reporting and verification mechanism
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develop guidelines for the establishment and operation of the Green Credit Registry and trading platform
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establish or designate the Green Credit Registry, and trading platform service provider in accordance with the approved guidelines
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develop guidelines for the green credit programme portal, the knowledge and data platform, and for the fees from the registered entities
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develop guidelines for the market stability mechanism for trading of green credit
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The Steering Committee and Technical Committee will consist of representatives from Ministries or Departments, experts from the field of the environment, and industry associations.
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Auditors: The Central Government will appoint independent auditors, on the recommendations of Steering Committee, to audit the Administrator, designated agency, Registry, trading platform and knowledge and data platform within a period of 1 year at the end of every 3rd financial year.