How does the offset mechanism work?

The offset mechanism is a voluntary, project-based, baseline-and-credit system for entities that are not obligated. A company, developer or organisation registers a project that reduces, removes or avoids emissions, follows an approved methodology, gets it validated and verified by an ACVA, and can then be issued CCCs.

Key milestones on official sources:

• December 2023: the CCTS amendment introduced the offset mechanism.
• 28 March 2025: the Government approved the Detailed Procedure for the Offset Mechanism and eight methodologies, covering renewable energy (including hydro and pumped storage), green hydrogen production, industrial energy efficiency, landfill methane recovery, and mangrove afforestation and reforestation (PIB, Ministry of Power, 28 March 2025).
• End of 2025: the Ministry of Power's year-end review said 9 methodologies had been published (PIB, 2025).
• 21 March 2026: at the Prakriti 2026 conference, the Indian Carbon Market portal was launched, and the Power Minister said over 40 registered entities were submitting projects in biogas, hydrogen and forestry (PIB, 21 March 2026).

BEE lists ten sectors for offsets in two phases. Phase I: energy, industries, agriculture, waste handling and disposal, forestry, and transport. Phase II: fugitive emissions, construction, solvent use, and carbon capture, utilisation and storage (BEE, 2026). In 2026 BEE also sought comments on draft project design document templates, ecosystem-based approaches with a non-permanence risk tool, and a procedure for programmes of activities.