Regulatory updates

Recently, the Government of India (GOI) launched the Green Credit Programme (GCP) under the Lifestyle for Environment (LIFE) initiative¹⁴ The idea of LiFE was introduced by India during the 26th United Nations Climate Change Conference of the Parties (COP26) in Glasgow in 2021. The idea promotes an environmentally conscious lifestyle that focuses on ‘mindful and deliberate utilisation’ instead of ‘mindless and wasteful consumption.. The aim of the GCP is to incentivise environment positive actions and encourage sustainable lifestyle by driving consumer and community towards behavioural changes that promote environment friendly actions. Under the GCP, green credit would be generated, which would be tradable on a domestic market platform.

As part of the GCP, on 12 October 2023, the Ministry of Environment, Forest and Climate Change notified the Green Credit Rules, 2023 (the Rules). Some of the key provisions of the Rules are discussed below:

• Applicability and scope: The Rules specify that green credit would be independent of carbon credit under the Carbon Credit Trading Scheme, 2023 made under the Energy Conservation Act, 2001. However, it has been specified that an environmental activity generating green credit may have climate co-benefits as well, such as reduction or removal of carbon emissions and may thus, be eligible for obtaining both green as well as carbon credit for the same activity. Industries, companies and other entities may undertake voluntary environmental measures by generating or buying green credit. The Rules came into force from the date of publication in the Official Gazette, i.e., 12 October 2023.
• Eligible activities: The Rules lay down certain activities w.r.t. protection, preservation or conservation of environment, which would be eligible for generation of green credit. These are:

• Tree plantation – to promote activities for increasing the green cover across the country
• Water management – to promote water conservation, water harvesting and water use efficiency or water savings, including treatment and reuse of wastewater
• Sustainable agriculture – to promote natural and regenerative agricultural practices and land restoration to improve productivity, soil health and nutritional value of food produced
• Waste management – to promote circularity, sustainable and improved practices for waste management, including collection, segregation, and environmentally sound management
• Air pollution reduction – to promote measures for reducing air pollution and other pollution abatement activities
• Mangrove conservation and restoration – to promote measures for conservation and restoration of mangroves
• Ecomark label development – to encourage manufacturers to obtain ecomark label for their goods and services, and
• Sustainable building and infrastructure – to encourage the construction of sustainable buildings and other infrastructure using environment friendly technologies and materials.

• Procedure and methodology: The Rules specify that:

• A person or entity desirous of obtaining green credit must register the activity with the administrator (i.e., the Indian Council of Forestry Research and Education)
• On receipt of the application, the administrator would get the activity verified by a designated agency. Upon satisfactory verification, green credit certificate would be granted to the applicant
• The methodology for calculating green credit in respect of any activity undertaken would be notified by the Central Government in due course.

To access the text of the Rules, please Click here

‘Water management’ has been identified as one of the eligible activities for generation of green credit. In this regard, pursuant to the issue of the Rules, on 23 October 2023, the GOI issued the draft methodology for water harvesting based green credit (the methodology). The methodology lists down certain key details, such as – the type of project, site selection process, water conservation/harvesting structures, calculation of issuance of green credit, etc.

The methodology would come into effect on or after the expiry of a period of 15 days from the date of publication of the methodology in the Official Gazette, i.e., 23 October 2023.

To access the text of the methodology, please click here