With India's recent announcement on a roadmap and action plan for the creation and selling of carbon credits in the global market, in compliance with Article 6.2 of the Paris Agreement, the domestic carbon credit market is set to boom in the coming years, say experts.

India is a significant exporter of carbon credits and has issued 278 million credits in the voluntary carbon markets between 2010 and 2022, accounting for 17% of the global supply.

The Taskforce on Scaling Voluntary Carbon Markets (TSVCM), sponsored by the Institute of International Finance (IIF) with knowledge support from McKinsey, estimates that demand for carbon credits could increase by a factor of 15 or more by 2030 and by a factor of up to 100 by 2050.

Overall, the global market for carbon credits could be worth upward of $50 billion in 2030 from the current $2 billion market, experts say.

"Currently, we have done about 200 million credits and another 300 million credits are in the pipeline. Our credits are currently valued about ₹2,100 crore and that value is expected to increase to ₹6,000-₹7,000 crore within a year", says Manish Dabkara, CMD of EKI Energy Services and President of the Carbon Markets Association of India (CMAI).

EKI Energy Services is the largest carbon credits developer among the developing countries and is ranked among the top five globally, and has 3,500 plus customers across 40 countries. Out of the 493 MtCo2e (metric tons of carbon dioxide equivalent - a measurement for carbon pollution) credits generated globally, EKI accounts for 78 MtCo2e and has 15% of the global market share. Debkara says returns from carbon credits are much higher than any financial instruments (upwards of 20%) and EKI advises most of its customers to sell within 6-12 months, in lieu of the global carbon credit market growth.

carbon credits market

India to lead $50 bn global carbon credits market by 2030