New Delhi: The Ministry of Environment, Forest and Climate Change (MoEFCC) Tuesday notified the draft ‘Green Credit Programme (GCP)’ implementation rules 2023.

Under this, individuals, industries, farmers producers organisations (FPOs), urban local bodies (ULB), gram panchayats and private sectors, among a host of other entities, will be able to earn “green credit” for undertaking environment-friendly actions. These include planting trees, conserving water, waste management and reducing air pollution.

The programme aims to create a market-based mechanism for these entities to earn incentives in the form of green credits. The idea, environment ministry officials told ThePrint, is to “incentivise voluntary environmental actions”.

The green credits will be tradable and those earning it will be able to put these credits up for sale on a proposed domestic market platform.

Speaking to ThePrint, Union environment secretary Leena Nandan said that the draft notification will be out on public domain for 60 days for inviting objection and suggestion after which the rules will be notified.

The notification of draft rules comes almost five months after Union Finance Minister Nirmala Sitharaman’s announcement in the 2023-24 budget and around two months after the MoEFCC readied the draft contours for rolling out the GCP.

How this will work

The environment ministry has identified eight select activities under The Environment (Protection) Act, 1986, for which green credit can be earned — tree plantation, water conservation, water harvesting and water use efficiency/savings, promoting natural and regenerative agricultural practice, waste management, air pollution reduction, mangrove conservation and restoration, ecomark based green credit and construction of buildings and other infrastructure using sustainable technology and material.

For instance, an individual who undertakes tree plantation in an area, can earn green credits, which can then be sold at the trading platform after a steering committee has validated them. Similarly, a ULB can earn green credit for building waste management infrastructure. Each green credit will have a monetary value assigned.

However, the entities will also be made to pay environmental compensation for violation of the provisions contained in the notification.

The draft notification states that the environmental compensation will be collected by a GCP administrator and be deposited in a separate dedicated account. This fund will then be utilised for taking measures for market stabilisation along with other activities related to the implementation of GCP as approved by the steering committee.

An environment ministry official had earlier told ThePrint that the green credits can be bought by environment conscious companies or industries wanting to avail loan at a cheaper rate of interest for undertaking environment friendly interventions. “The trading platform will connect all players, who are suppliers of green credit,” the official said.

Thresholds and benchmarks will be developed for each green credit activity or process for generating and issuance of green credit. Allocation of one unit of GC for each activity will be determined based on the environmental outcome achievable, equivalence of resource requirement, parity of scale, scope, size and other relevant parameters.

The government will also develop and establish digital processes for the GCP, including self-assessment of eligible green credit activities, registration of projects, issuance of green credits and monitoring performance.

Who will govern GCP’s implementation 

The environment ministry has proposed that a steering committee headed by the environment secretary and comprising officials from concerned ministries/departments, domain experts and industry associations will govern the implementation of GCP.

According to the draft notification, the committee will not only approve procedures for institutionalising the GCP but also approve its rules and regulations and make recommendations to the central government for issuance of Green Credit Certificate. It will determine the type and amount of fees and charges for the purpose of meeting the cost and expense towards implementation of GCP

The Indian Council of Forestry Research and Education (ICFRE) will be the administrator of GCP and will manage, monitor and operate the entire programme. It will register the green credits and maintain records of all transactions and ensure that trade happens with requisite discipline.

The ICFRE will constitute technical or sectoral committees for each different activity to facilitate in developing methodologies and standards and processes for registration of GC projects and grant of GCs. The technical committee will also decide the value of green credit to be awarded. ICFRE will issue guidelines for the establishment of the trading platform for the exchange of green credit certificates with the approval of the steering committee.

The trading platform for the exchange of Green Credit Certificates shall be established by the Trading Service Provider accredited by the GCP administrator. The ICFRE will also specify the procedure including eligibility criteria for accreditation of entities to act as accredited green credits verifiers with the approval of the steering committee.

The environment ministry official quoted earlier said that an activity may accrue both green credits as well as carbon credits if it helps in carbon emissions reduction or removal, which may be sold under GC market or carbon market respectively.