|
Answer at a glance: A business buying green electricity in India is buying two separable things: the electricity itself, and the environmental attribute of that electricity. The attribute is what a sustainability claim rests on, and it reaches the buyer either bundled inside a supply contract or unbundled as a certificate. Renewable energy certificates in India are issued by the Central Agency under regulations made by the Central Electricity Regulatory Commission, one certificate for each megawatt-hour injected into the grid, and certificates of this kind are what market-based Scope 2 emissions accounting recognises. Carbon credits are a different instrument — denominated in tonnes of carbon dioxide equivalent rather than megawatt-hours — and under the GHG Protocol they cannot be used to reduce reported Scope 2 emissions. |
Two things have arrived together. Indian companies are now disclosing more, to more audiences, on tighter timetables — SEBI's reporting framework at home, RE100 and CDP for those with global commitments, and customer questionnaires from buyers who face their own obligations abroad. At the same time the Indian instrument set has become genuinely more capable: a rebuilt certificate market, a virtual power purchase agreement route recognised in regulation, and a national carbon market being stood up in stages. The risk in that combination is not scarcity. It is vocabulary. Certificates, credits and attributes get used interchangeably in procurement conversations, and they are not interchangeable instruments. This piece separates them, and says plainly which one carries a claim that survives review.
|
Definition: A green attribute is the set of environmental characteristics belonging to one unit of electricity generated from a renewable energy source — recorded, and capable of being transferred, separately from the electricity itself. Once the attribute has been transferred away or retired against someone else's claim, the electricity it came from can no longer be described as renewable for accounting purposes. |
This separation is not a legal fiction invented for reporting. It follows from how a grid works. Electricity from every generator connected to the same synchronous system pools together, and no meter can tell a consumer which plant produced the units it recorded. Physical tracing is impossible, so the accounting had to be built on contracts instead.
The consequence is the single most important rule in this whole subject: an attribute can be claimed once. If a generator sells the attribute to one buyer, it is gone. The electricity that remains is, for accounting purposes, ordinary grid electricity. A business that buys renewable electricity but allows the attribute to be sold elsewhere has bought electricity, not a claim.
|
Definition: A renewable energy certificate is a tradable instrument representing the environmental attributes of one megawatt-hour of electricity generated from a renewable source and injected into the grid. In India, certificates are issued by the Central Agency — the National Load Despatch Centre, operated by Grid Controller of India — under regulations made by the Central Electricity Regulatory Commission, and are extinguished when they are redeemed against an obligation or a voluntary claim. |
The mechanism has been rebuilt once already, and a great deal of what is written about it online still describes the version that was replaced. The Commission notified the current regulations in May 2022, and they came into force on 5 December 2022 — which is why that date reappears below. Three changes matter commercially.
Price is now discovered, not administered. The floor and forbearance prices that bracketed certificate prices under the earlier framework were removed. There is no regulated minimum and no regulated ceiling. Any figure quoted from the old regime — and the historic solar floor of ₹12,000 per megawatt-hour still circulates — is not a current benchmark.
Technology is recognised through a multiplier, not through separate price categories. The old split between solar and non-solar certificates, each with its own price band, gave way to a single instrument whose issuance is scaled by a technology multiplier. The First Amendment to the regulations, notified in March 2026, sets that multiplier at 1.0 for onshore wind and solar, 1.5 for hydro, 2.0 for municipal solid waste and non-fossil co-generation and 2.5 for biomass and biofuel, for projects commissioned between 5 December 2022 and the amendment's commencement. A multiplier, once assigned, holds for fifteen years from commissioning. Projects commissioned after the amendment take multipliers set out in its appendix.
Eligibility now reaches beyond generators. Distribution licensees and open access consumers can register renewable energy they have purchased — but only the volume beyond their own obligation. Captive generating stations can register too, with the important qualification that certificates corresponding to self-consumption are not eligible for sale. The same amendment added a virtual power purchase agreement route: certificates issued to a generating station under such an agreement stand transferred to the consumer or designated consumer, who applies them to a renewable purchase or consumption obligation, and are extinguished on transfer.
| Renewable energy certificates in India | Position as at August 2026 |
| Denomination | One certificate for one megawatt-hour injected into the grid |
| Issuer | Central Agency — National Load Despatch Centre, Grid Controller of India |
| Governing regulation | CERC REC Regulations, notified May 2022, in force from 5 December 2022; First Amendment notified March 2026 |
| Price control | None. Floor and forbearance prices were removed in 2022; price is market-discovered |
| Where it trades | Power exchanges, twice a month — second and last Wednesday, bidding 13:00–15:00, double-sided closed auction with price-prorata allocation |
| Clearing prices, July 2026 sessions | ₹380 per certificate on 8 July 2026 and ₹376 on 29 July 2026, on the Indian Energy Exchange |
| Volume, July 2026 | 7.11 lakh certificates traded on that exchange, with sell bids down sharply year on year |
| Who buys | Entities meeting a renewable consumption obligation, and voluntary corporate buyers making a renewable electricity claim |
The demand side has a name and a date. The Renewable Consumption Obligation, notified by the Ministry of Power on 27 September 2025, replaced the earlier framework and sets a trajectory rising to 43.33 per cent by FY2029-30. It applies to distribution licensees and, through the designated consumer route, to captive and open access consumers in notified energy-intensive sectors. Certificates are one of the ways that obligation can be met, alongside consuming renewable energy directly, a virtual power purchase agreement, and a buyout.
There are only two answers: bundled, or unbundled. Bundled means the attribute stays with the electricity and reaches the buyer as part of the supply. Unbundled means it has been separated and sold as a certificate, to this buyer or to someone else.
Indian regulation does not settle this with a clause about who owns an environmental attribute. It settles it through certificate eligibility, which produces the same result. Where a generating station's tariff has been determined under Section 62 or adopted under Section 63 of the Electricity Act, and the energy is counted toward obligation compliance, that energy is generally not eligible for separate certificates. The attribute therefore stays with the electricity in a tariff-based agreement. Where renewable energy is sold at a negotiated price outside those routes, separation becomes possible — which is precisely why the contract has to say what happens to it.
There is also a second, less familiar instrument. Rule 10 of the Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022 provides that the distribution licensee shall give a green certificate on a yearly basis to consumers for the green energy supplied to them on request, beyond the consumers' own renewable purchase obligation. That is a different thing from a certificate issued by the Central Agency: a different issuer, an annual cadence, and a scope limited to consumption beyond the consumer's own obligation. The two are frequently written about as though they were the same document.
| Route | How the attribute reaches the buyer | What the buyer ends up holding |
| Tariff-based PPA — tariff determined under Section 62 or adopted under Section 63 | Bundled. That energy is generally not eligible for separate certificates. | Renewable electricity with its attribute intact, evidenced by the contract and metering rather than by a certificate. |
| Bilateral or open access supply at a negotiated price | Depends entirely on the contract. Separation is possible, so silence is dangerous. | Whatever the agreement says. If the attribute is not expressly conveyed and retired for the buyer, assume it is not held. |
| Captive and group captive | Bundled through ownership and consumption. | The attribute of self-consumed energy. Certificates corresponding to self-consumption cannot additionally be sold. |
| Virtual power purchase agreement | Certificates issued to the plant stand transferred to the consumer and are extinguished on transfer. | A renewable claim plus a financial hedge, with no physical delivery. |
| Green tariff from the distribution company | Bundled in the tariff; a green certificate is issued annually on request under Rule 10, beyond the consumer's own obligation. | A discom-issued annual green certificate, not a Central Agency certificate. |
| Unbundled certificate bought on an exchange | Bought separately from the electricity, from a different counterparty, often in a different state. | A certificate. The buyer's physical supply is unchanged. |
For a business weighing these routes against an on-site or open access solar programme, a practical guide to solar for businesses sets out the physical side of the same decision. The point to carry into it is narrow: the physical route and the attribute route are separate questions, and answering one does not answer the other.
No. They are a different unit, measuring a different thing, produced by a different process — and they are the most commonly substituted item in this whole field.
|
Definition: A carbon credit is a certificate representing one tonne of carbon dioxide equivalent reduced, removed or avoided by a project, verified against a baseline and an additionality test. In India, the compliance unit under the carbon credit trading scheme is the Carbon Credit Certificate, issued by the Bureau of Energy Efficiency and held in a registry operated by Grid Controller of India. |
The CCTS was notified by the Ministry of Power on 28 June 2023 under the Energy Conservation (Amendment) Act, 2022, and has been built out in stages since: a subsequent amendment adding a voluntary offset mechanism, a compliance procedure from the Bureau of Energy Efficiency in July 2024, and offset procedures with the first approved methodologies effective 27 March 2025. The emission intensity targets themselves sit in a separate rule made by the Ministry of Environment, Forest and Climate Change.
Coverage is industrial and deliberately staged. Target notifications now reach eight industry groupings — aluminium and secondary aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles — with roughly 490 obligated entities as counted by the International Carbon Action Partnership in February 2026. Iron and steel targets remained at draft stage, with a draft notification issued in June 2026; fertiliser targets had not been notified. The first compliance year is FY2025-26, with performance documents due within four months of the year end. The Central Electricity Regulatory Commission's trading regulations, notified in February 2026, confine trading to registered power exchanges in monthly sessions with T+1 settlement, inside a price band still to be set; shortfall attracts environmental compensation at twice the average trading price for the cycle. As at August 2026, exchange trading of Carbon Credit Certificates had not commenced, the floor and forbearance band had not been published, and the first session was expected later in the year.
| Renewable energy certificate | Carbon Credit Certificate | |
| Unit | One megawatt-hour of renewable electricity | One tonne of carbon dioxide equivalent |
| What it evidences | Where a specific quantity of electricity came from | That a project reduced, removed or avoided emissions somewhere |
| Test applied | Generation, injection and non-duplication | A baseline and an additionality test |
| Issuer | Central Agency, under CERC regulations | Bureau of Energy Efficiency, under the CCTS |
| Used for | Renewable consumption obligation; market-based Scope 2 accounting; renewable electricity claims | The CCTS compliance obligation; voluntary offsetting claims |
| Reduces reported Scope 2? | Yes, where the quality criteria are met | No |
The accounting reason for that last row is worth stating, because it is the line most often crossed. The GHG Protocol treats offset credits and contractual electricity instruments as different mechanisms. Offsetting is project-level and impact-based: it compensates for emissions outside the reporting company's own inventory, and it requires proof that the project would not have happened anyway. Scope 2 accounting is attributional: it allocates the emissions of electricity the company actually consumed, and no additionality test applies to it. Buying tonnes does not change the emission rate of the electricity a factory drew last year.
Two practical notes follow. Within the CCTS itself, offset-mechanism credits are not currently usable to meet a compliance obligation — the two pools are separate. And for buyers who assume a green electricity contract also mints carbon credits somewhere: the Bureau's approved methodology for grid-connected renewable generation excludes standalone new-build wind and solar plants. Eligibility runs to hydro, geothermal, offshore wind, wave and tidal, pumped storage and hybrid renewable-plus-storage configurations — not to an ordinary greenfield solar or wind farm, and not to biomass-fired generation.
|
Definition: Market-based Scope 2 accounting reports the emissions of purchased electricity using the emission rate conveyed by the contractual instruments a company holds, rather than the average emission rate of the local grid. It sits alongside location-based accounting, not in place of it. |
The GHG Protocol is explicit that both are reported. In its words: “Companies with any operations in markets providing product or supplier-specific data in the form of contractual instruments shall report scope 2 emissions in two ways and label each result according to the method: one based on the location-based method, and one based on the market-based method.” A market-based figure does not replace the grid-average one. It is reported next to it.
What may be used in that market-based figure is governed by eight quality criteria — seven describing the instrument itself, and one describing the market data that has to sit around it. Summarised, and in the order the guidance sets them out:
| # | Scope 2 quality criteria — summarised from the GHG Protocol Scope 2 Guidance |
| 1 | Convey the direct greenhouse gas emission rate attribute of the electricity produced |
| 2 | Be the only instrument carrying that emission-rate claim for that quantity of generation |
| 3 | Be tracked and redeemed, retired or cancelled by or on behalf of the reporting entity |
| 4 | Be issued and redeemed as close as possible to the period of consumption to which it is applied |
| 5 | Be sourced from the same market in which the consuming operations are located |
| 6 | For a supplier-specific emission rate: be calculated on delivered electricity, incorporating certificates retired on customers' behalf |
| 7 | For a direct purchase from a generator: transfer all emissions-claim instruments to the reporting entity only |
| 8 | Be accompanied by an adjusted residual mix for unclaimed electricity — or, where none is available, its absence must be disclosed |
Three of those bite hardest in India, and they are worth taking one at a time.
Criterion five is a boundary, and India is its own market. Under RE100's technical criteria, countries are treated as separate markets for renewable electricity, with narrow exceptions for the United States and Canada, and for interconnected European markets that share regulation and accounting. An Indian operation's claim needs Indian instruments. Certificates bought in another market do not travel to it.
Criterion eight has no Indian answer yet. No residual mix emission factor is published for the Indian grid — the emission rate of the electricity left after every claimed attribute has been removed. The India GHG Program, the voluntary corporate accounting programme run jointly by WRI India, CII and TERI, records it as not yet available. The criterion anticipates exactly this situation: where no adjusted residual mix exists, the reporting entity discloses its absence. That is a step worth building into the reporting process rather than discovering at assurance.
Criterion two explains why the certificate market is thinner than the installed base suggests. Much utility-scale renewable capacity in India is contracted under tariffs determined or adopted under the Electricity Act, and that energy is generally not eligible for certificates. The attribute is already conveyed, once, through the supply contract. That is the mechanism working correctly — no double counting — but it means the pool of unbundled Indian certificates is small relative to installed renewable capacity, which is visible in the sharply reduced sell-side participation reported on the exchange through 2026.
One more rule catches buyers by surprise, and it is about the age of the plant rather than the paperwork. RE100 requires the renewable electricity a member claims to come from generating facilities commissioned or repowered within the preceding fifteen years, applying from the first reporting period beginning on or after 1 January 2024. Members may exempt procurement of up to 15 per cent of their total electricity consumption, and self-generation, on-site agreements, direct-line supply and contracts commencing before that date are also exempted. A long-dated certificate from a two-decade-old plant is a valid instrument and may still fail this test.
It is also worth knowing which way the ground is moving. The GHG Protocol has a revision of its Scope 2 guidance under way; a public consultation closed on 31 January 2026 and the responses are with its Scope 2 technical working group. A formal consultation on a draft Actions and Market Instruments standard — the workstream carrying much of the market-based accounting question — is planned for 2027. Hourly matching of generation to consumption, and geographic deliverability, are among the proposals under consideration. None of that is adopted, and no company should report as though it were. The useful question for a buyer signing a fifteen-year supply structure today is a different one: would this contract still support a claim if those proposals were adopted during its life?
Most large Indian companies encounter all of this first through SEBI's Business Responsibility and Sustainability Report, which has applied to the top 1,000 listed companies by market capitalisation since FY2022-23. Understanding what it asks — and what it does not — saves a great deal of confusion later. For Resolven's own view of why this matters beyond the filing, see building ESG into how the business is run.
BRSR Core is the assured subset: nine attributes across environment, social and governance, of which the energy footprint attribute captures total energy consumed and the split between renewable and non-renewable sources. The report separately asks companies to categorise the electricity they receive — wheeled renewable, wheeled non-renewable, renewable supplied under a green tariff programme, and grid supply.
SEBI has sequenced this deliberately. It set the assured-reporting glide path in July 2023 — the top 150 listed entities in FY2023-24, then 250, then 500, reaching the top 1,000 by FY2026-27. Its circular of 28 March 2025 then added flexibility on how that assurance is obtained, allowing entities to choose assessment or assurance; made value chain ESG disclosure voluntary and deferred it; and introduced a voluntary green credit disclosure as a leadership indicator.
Here is the gap that matters. BRSR directs companies to use the applicable grid emission factor published by the Central Electricity Authority for Scope 2. It does not implement dual reporting, and it does not gate the renewable figure on the quality criteria. That is not a flaw — the two frameworks answer different questions. BRSR asks a listed company to disclose, comparably and assurably, how much energy it used and how much of it was renewable. The GHG Protocol asks a different question: what emission rate may this company attribute to the electricity it consumed. A company can report a high renewable share in its BRSR filing and still not hold instruments that support a market-based Scope 2 figure a global standard would recognise. Both statements can be true at once, and a sustainability head who has only run the first exercise should not assume the second is done.
Everything above reduces to a small number of questions, and all of them are contracting questions rather than reporting questions. They are answered before the first unit is delivered, not during the disclosure cycle.
| Ask before signing | Why it decides the claim |
| Does the green attribute come with the electricity, or is it sold separately? | This is the whole claim. If the contract is silent, assume the attribute is not yours. |
| If certificates are involved, who retires them, in whose name, and in which registry? | Criterion three. An instrument that is held but never retired on your behalf does not support a claim. |
| Are they Indian instruments? | Criterion five and the RE100 market boundary. India is its own market. |
| What vintage are they, relative to the year of consumption? | Criterion four. Instruments should be issued and redeemed as close as possible to the consumption period. |
| When was the generating asset commissioned or repowered? | RE100's fifteen-year rule, subject to an exemption capped at 15 per cent of the member's total electricity consumption. |
| Can the counterparty confirm nobody else is claiming the same megawatt-hour? | Criterion two, and the reason double counting rules exist across every one of these instruments. |
None of these questions is exotic, and none of them requires the buyer to become an energy specialist. They require the supply structure to be written down properly. That is where aligning growth, sustainability and energy security actually happens for a commercial buyer — not in the pledge, but in the clause that says who holds the attribute and who retires it.
Also Read: India’s Power Sector, Explained: Who Generates, Who Delivers, and Where the Growth Is Coming From
An attribute only becomes separately tradable when the electricity behind it is sold outside a tariff-based contract. That makes the size of India's merchant market a live constraint on anyone shopping for unbundled instruments. Speaking on a panel at an industry summit in August 2026, Parag Sharma, chief executive of Resolven, said a more mature derivatives market would require greater volume in the merchant market. Reporting from the same event put merchant sales at only 5 to 10 per cent of the Indian market, because most power purchase agreements are signed for long-term delivery. For a buyer shopping for unbundled certificates, that is the supply side of the thin pool described earlier in this post: not a shortage of renewable generation, but a shortage of renewable generation sold in a form that leaves the attribute free to travel on its own.
The route that is growing is the virtual one. At the same event, Sharma said activity in virtual power purchase agreements has increased since the Central Electricity Regulatory Commission clarified their contours, and that most of the electricity procured by hyperscalers is contracted through VPPAs. The certificate side of that route is already provided for: the 2026 amendment assigns the certificates linked to a virtual agreement to the consumer, to be used for obligation compliance and then extinguished. Which route suits a given buyer still depends on its load shape, its location and what its disclosure obligations actually require — questions answered in a renewable supply contract for enterprise customers, informed by how complementary wind and solar generation profiles shape what can physically be delivered, and by how sustainability is managed across the asset lifecycle.
No. Under the GHG Protocol, offset credits are excluded from market-based Scope 2 accounting. Scope 2 is attributional — it allocates the emissions of electricity the company actually consumed — while an offset compensates for emissions elsewhere. Credits may be reported separately, outside the inventory, but they do not change the Scope 2 figure.
No. The domestic certificate is issued by the Central Agency under CERC regulations. The International REC Standard is a separate scheme; ICX, a subsidiary of the Indian Energy Exchange, was approved as the local issuer for India, and new device registrations have been made directly with ICX since September 2024. The two schemes operate anti-double-counting rules between them, so a given project's attributes are registered in one system rather than both.
It gives you a documented one only if you ask for the document. Rule 10 of the Green Energy Open Access Rules, 2022 requires the distribution licensee to issue a green certificate annually, on the consumer's request, for green energy supplied beyond the consumer's own renewable purchase obligation. It is issued by the licensee, not by the Central Agency, and it is not a tradable certificate.
Not necessarily. BRSR asks for energy consumed and the renewable share, using the Central Electricity Authority's grid emission factor. A market-based Scope 2 claim recognised by CDP, SBTi or RE100 additionally requires contractual instruments meeting eight quality criteria, and — in India, where no residual mix is published — disclosure that the residual mix is unavailable. The two exercises overlap; they are not the same exercise.
