The Delhi Government has approved a proposal to implement a Carbon Credit Monetization Framework to convert the city’s green projects into revenue-generating assets to support pollution control and sustainability efforts.

Under the framework, every verified reduction of one metric ton of CO2 equivalent from Delhi’s climate initiatives would generate a tradable carbon credit, which can be sold in voluntary or compliance carbon markets globally.

The model is designed as a ‘no financial liability’ approach by building on existing green programs across multiple departments, including Transport, Power, Forests, Delhi Jal Board, and Urban Development.

The framework will help quantify the city’s climate actions, certify them under global standards such as VERRA and the Gold Standard, and enable transparent monetisation within the Indian Carbon Market.

The Department of Environment, Forests & Wildlife will act as the nodal agency to oversee the rollout, including identifying and registering emission-reduction projects across sectors, establishing a monitoring, reporting, and verification system to ensure data integrity and auditability, and enabling issuance and trading of credits through approved platforms.

The plan also includes capacity building within departments and positioning Delhi as a leader in climate finance aligned with national goals.

As per the proposal, expert agencies may be engaged on a success-fee basis, with payments linked only to revenues realised, ensuring no upfront costs for the government.

Up to three agencies are likely to be empanelled to scale participation and execution of carbon credit projects.

The empanelment process is expected to begin soon and cover end-to-end activities, including project assessment, documentation, validation, registration, credit issuance, trading strategy, and training.

Proceeds from carbon credit sales would be used for pollution prevention, climate adaptation, and environmental management through a dedicated mechanism, according to reports.

The move is still pending Cabinet approval.

The Ministry of Environment, Forest, and Climate Change has constituted a National Designated Authority for India to implement Article 6 of the Paris Agreement, creating an institutional framework to evaluate, approve, authorize, and regulate projects and emission reduction units under international market and non-market cooperation mechanisms.

The Energy Conservation (Amendment) Bill, 2022, paved the way for the establishment of the carbon credit trading market in India.