Carbon Credits
Everything You Need to Know About Carbon Credits
As businesses across India commit to cleaner operations and net zero goals, carbon credits have become one of the most talked-about tools in climate action. But what are carbon credits, how do they work, and why should Indian businesses pay attention now?
At Emperia 1900, the hygiene division of Empire Industries Limited, we believe sustainability is part of hygiene. A cleaner facility and a cleaner planet go hand in hand. In this guide, we explain carbon credits in plain language, from the basics to India’s new carbon market
What Are Carbon Credits?
A carbon credit is a tradeable certificate that represents one tonne of carbon dioxide (CO₂) or an equivalent amount of another greenhouse gas (tCO₂e) that has been reduced, avoided, or removed from the atmosphere.
Put simply, 1 carbon credit = 1 tonne of CO₂e. Carbon credits turn emissions into something that can be measured, verified, and traded, which gives businesses a financial reason to pollute less.
Carbon Credits vs. Carbon Offsets: What's the Difference?
The two terms are often used interchangeably, but there is a difference:
- Carbon credits usually refer to credits earned or traded within a regulated (compliance) system, where companies must meet legal emission targets.
- Carbon offsets are typically bought voluntarily by companies or individuals to compensate for emissions they cannot yet avoid.
Both are measured in the same unit, one tonne of CO₂e.
Why Do Carbon Credits Matter?
Carbon credits support climate action in three key ways:
- They limit emissions: Setting targets or caps on greenhouse gas output pushes industries to measure and control their carbon footprint.
- They reward cleaner choices: Companies that invest in energy efficiency, renewable energy, or greener processes can earn credits and sell them, turning sustainability into a revenue stream.
- They channel money into climate project: Credit purchases fund reforestation, clean energy, and emission-reduction projects that might not otherwise get built.
How Do Carbon Credits Work?
There are two main models for carbon markets.
1. Cap-and-Trade
This is the model used in the EU and elsewhere:
- The government sets a limit (cap) on total emissions.
- Companies that emit less than their allowance can sell the unused portion.
- Companies that emit more must buy allowances to cover the gap.
2. Baseline-and-Credit
India uses an intensity-based system instead of an absolute cap. Each covered company gets a target for emissions per unit of product, for example per tonne of cement. Obligated entities that achieve emission reductions beyond their targets receive carbon credit certificates, while those that fall short must purchase certificates from the Indian Carbon Market to cover the deficit.
Either way, the principle is the same: emission reduction becomes a shared, market-driven responsibility.
Compliance vs. Voluntary Carbon Markets
- Compliance carbon market: Participation is mandatory for designated industries. Governments set the rules, the targets, and the penalties.
- Voluntary carbon market: Businesses buy credits by choice, often to meet ESG commitments or net zero goals. Credits are verified by independent standards such as Verra (VCS) and Gold Standard.
India's Carbon Credit Trading Scheme (CCTS)
India is building its own national carbon market, and it is one of the most important developments for Indian industry this decade.
- The legal foundation: The Energy Conservation (Amendment) Act, 2022 provided the statutory basis for carbon credit certificates, while the Carbon Credit Trading Scheme, 2023 established the institutional structure of the Indian Carbon Market.
- Who runs it: A National Steering Committee co-chaired by the Secretaries of the Ministry of Power and MoEFCC oversees the scheme, Grid Controller of India Limited acts as the central registry, and BEE serves as the scheme administrator.
- Who is covered: As of March 2026, GHG emission intensity targets have been notified for entities across nine sectors: aluminium, chlor-alkali, cement, fertiliser, iron and steel, pulp and paper, petrochemicals, petroleum refinery, and textiles.
- The offset route for everyone else: Businesses outside these sectors can still take part. The offset mechanism allows non-covered entities to register eligible projects that reduce, remove, or avoid greenhouse gas emissions and receive Carbon Credit Certificates.
- When trading starts: Trading is expected to start in the second half of 2026. The scheme supports India’s national commitment to reduce emissions intensity by 45% below 2005 levels by 2030.
Types of Carbon Credits
Carbon credits come from projects that either avoid/reduce emissions or remove carbon from the atmosphere. Common types include:
- Renewable Energy Credits: From solar, wind, and hydropower projects that replace fossil fuel power. (Note: these are different from Renewable Energy Certificates, or RECs, which track 1 MWh of clean electricity rather than a tonne of CO₂e.)
- Forestry and Land-Use Credits: From reforestation, afforestation, mangrove restoration, and responsible forest management.
- Agricultural Credits: From sustainable farming practices that cut methane, improve soil carbon, and protect land.
- Energy Efficiency and Industrial Process Credits: From cleaner technologies and more efficient industrial operations.
- Carbon Capture and Storage (CCS) Credits: From technology that captures CO₂ and stores it securely underground.
Nature-based credits (forests, soil, mangroves) and technology-based credits (CCS, green hydrogen) each have their place. Removal credits are generally considered higher quality for long-term net zero goals.
How Can Businesses Use Carbon Credits Responsibly?
Carbon credits work best as part of a wider sustainability plan, not a replacement for one:
- Measure your carbon footprint across operations, energy use, transport, and supply chain.
- Reduce first. Cut emissions through efficiency, renewable power, and smarter product choices.
- Offset what remains with high-quality, verified credits.
- Avoid greenwashing. Buying credits while making no real changes can damage trust with customers and investors.
How Emperia 1900 Supports Sustainable Facilities
Everyday operational choices, including how a facility is cleaned, add to its environmental footprint. At Emperia 1900, we build chemical-conscious hygiene solutions using our Smart Micellar Technology, designed to improve cleaning efficiency while reducing environmental impact.
Our concentrated formulas, such as the Vol. 9 Descaler & Shine Concentrate and our floor and surface cleaners, are diluted on site. That means fewer containers, less plastic packaging, and fewer deliveries per cleaning cycle. For hotels, hospitals, schools, and facility management companies, small changes like these add up across hundreds of cleans.
Backed by over 100 years of Empire Industries’ legacy, we help facilities across India stay hygienic and responsible. Explore our full range of professional cleaning and housekeeping products, or book a free hygiene demo to see how our solutions fit your facility’s sustainability goals.
Final Thoughts
Carbon credits are more than a financial instrument. They put a price on pollution and reward businesses that choose cleaner ways of working. With India’s Carbon Credit Trading Scheme now taking shape, understanding carbon credits is becoming essential for every forward-looking business.
At Emperia 1900, we’re proud to support that shift, one clean, responsible facility at a time.