As India plans to reach its 2070 net-zero goal; there are many policies which are coming up evolving from energy efficiency to carbon accountability, progressing in the direction of that future. The foundational groundwork was laid by the PAT scheme (Perform, Achieve and Trade) and the shift towards being accountable for your emissions is taken forward by CCTS (Carbon Credit Trading Scheme).
In this blog, we will take you through the transitional pathway from PAT to CCTS along with the comparisons and how sentra.world enables industries falling under this framework to navigate this phase of carbon accounting and carbon compliance as an expert CCTS consultant.
Table of Contents
What is the PAT Scheme?
The Perform, Achieve and Trade (PAT) Scheme was launched in 2012 under the India’s effort towards sustainability i.e. India’s National Mission on Enhanced Energy Efficiency (NMEEE) launched by the Bureau of Energy Efficiency (BEE). The core agenda behind the PAT Scheme is to improve energy efficiency among the large industries (Designated Consumers) across 13 sectors- which is done by setting Specific Energy Consumption (SEC) targets.
Each cycle in this scheme runs for three years where SEC reduction targets are assigned to the industries sector specifically. The mechanism is that the overperformers earn Energy Saving Certificates (ESCerts), while underperformers must purchase them on power exchanges like IEX or PXIL. The trading of these certificates is regulated by CERC, and the registry of the certificate is managed by POSOCO/GRID.
1 ESCert = 1 tonne of oil equivalent (toe) of energy saved (~11,630 kWh).
Until now, a total of over 1300 industrial units across 13 sectors have participated in the PAT cycles and have helped achieve cumulative savings of nearly 27 million tonnes of oil equivalent (MTOE).
The PAT Scheme has established the foundation upon which CCTS is built, which is called the Measurement, Reporting and Verification (MRV) plan.
What is the CCTS Scheme?
The Carbon Credit Trading Scheme (CCTS) was first notified in June of 2023 under the Energy Conservation (Amendment) Act, 2022 by Bureau of Energy Efficiency (BEE) and it marks India’s transition from an energy efficiency scheme to a national carbon trading market and to maintain the sustainability standards. This scheme establishes the Indian Carbon Market where the companies must meet intensity reduction targets and trade Carbon Credit Certificates (CCCs) and each carbon credit represents, 1 tonne of CO2 equivalent (tCO₂e) reduced, avoided or removed.
To align the India’s industrial policies with the global climate goals and standards including a 45% reduction in emission intensity by 2030 – CCTS targets emissions per unit of output unlike PAT which focuses on energy.
Key governance in CCTS:
- Administrator: Bureau of Energy Efficiency (BEE)
- Registry: Grid Controller of India (Grid India)
- Trading Regulator: Central Electricity Regulatory Commission (CERC)
- Penalty Enforcer: Central Pollution Control Board (CPCB)
- Policy Oversight: National Steering Committee for Indian Carbon Market (NSCICM)
Currently, nine sectors which are energy intensive are covered under this scheme that includes – Iron & steel, Aluminum, Cement, Chlor Alkali, Petrochemicals, Textiles, Pulp & Paper, Petroleum Refineries and Fertilizers – these sectors represent ~16% of India’s GHG emissions. The most intensive sector, i.e. power which accounts for 40% of emissions, will join the scheme in the later phases.
CCTS uses an intensity-based credit system in which the Baseline is FY 2023-24 and the cycle is annual i.e. first phase FY 2025-26 and the second phase is FY 2026-27. The verified emission reductions below the specified targets are given CCCs, i.e. carbon credits, but the penalties are 2x the average of CCC market price for non-compliance.
This scheme also introduces a voluntary mechanism where non obligated entities undertake GHG-reduction projects and earn certified credits under Indian Standards and get an extra financing option while meeting the sustainability standards.
Understanding the shift from PAT to CCTS
| Parameter | PAT Scheme | CCTS Scheme |
| Launch Year | 2012 | 2023 |
| Regulatory Basis | Energy Conservation Act, 2001 | Energy Conservation (Amendment) Act, 2022 |
| Administering Agency | Bureau of Energy Efficiency (BEE) | Ministry of Power, BEE, CERC, CPCB, Grid India |
| Primary Objective | Improve energy efficiency (SEC reduction) | Reduce GHG emission intensity |
| Compliance Cycle | 3-year cycles | Annual cycles (targets reviewed every 3 years) |
| Unit of Trade | 1 ESCert = 1 MTOE saved | 1 CCC = 1 tonne of CO₂ reduced |
| Covered Sectors | 13 sectors | 9 energy-intensive sectors |
| Verification Authority | Accredited Energy Auditors (AEAs) | Accredited Carbon Verifiers (ACVAs, ISO 14064-compliant) |
| Market Platform | IEX, PXIL, HPX | IEX, PXIL, HPX (monthly trading) |
| Registry Management | BEE | Grid Controller of India (Grid India) |
| Penalty for Non-Compliance | ₹10 lakh(maximum). Additional Penalty (Rs.18402 X number of ESCerts (mtoe)) | Twice the average CCC market price (Environmental Compensation) |
| Credit Validity | Indefinite (perpetual) | Vintage-based (limited eligibility period) |
| International Linkage | None | Linked with article 6.2 – agreement with Japan on introducing Joint Crediting Mechanism (JCM) and CBAM (Not yet finalized)- international compatibility in mind |
| Price Discovery | Weak (floor price-driven) | Market-driven with stability mechanisms |
If you are one of the obligated companies notified by BEE, reach out to us for end-to-end CCTS consultancy and carbon credits management.
PAT to CCTS: Key Insights and Implications
- Framework for Compliance
PAT followed a 3-year cycle to meet the targets which provided flexibility but did not meet the standards of improvement for which it was introduced and that”s why CCTS was introduced which gave out annual reduction targets which ensures accountability and faster cycles towards decarbonization.
- The Market Strength
The efficiency of the PAT scheme working was undermined by the oversupply problem, and this is addressed in CCTS by restricting old credits from being used indefinitely and that prevents market distortion.
- The Strength of Penalties and Enforcement
The CPCB enforced penalties which are twice the market price of CCC’s and will create compliance pressure for the companies under CCTS, unlike the nominal fines which were enforced in PAT. With these high fines enforced making their performance a financial risk as well as reputational.
- Transparency in Verification and Reporting (MRV)
CCTS follows and mandates ISO 14064 compliant annual verification by Accredited Carbon Verification Agencies (ACVAs) which improve credibility and international alignment unlike PAT that used periodic energy audits.
- Global Integration
The CCCs in CCTS are compatible and liked with Article 6.2 and have an agreement with Japan of carbon credits trading which PAT’s energy saving logic could not achieve on a global scale.
- The Transition from PAT to CCTS
CCTS was introduced on PAT’s institutional base and the nine sectors which are notified as obligated entities under CCTS were under PAT-VII. Now the PAT will continue for selected sectors until full transition from PAT to CCTS happens by FY 2026-27.
CCTS Consultancy: How sentra.world can help industries navigate CCTS?
As India is transitioning from PAT to CCTS and also mapping the path for a carbon zero future , the industries will need to have a system where they can measure, mitigate and monetise their carbon emissions. This is where sentra.world simplifies this process for you, being an expert as a CCTS consultant with a comprehensive end-to-end support that ensure accuracy, compliance and a market advantage in the carbon trading.
Our CCTS consultancy includes:
- Monthly carbon performance calculation using CCTS-approved methodologies
- Liaison support with auditors and verifiers for smooth validation
- Dedicated expert for ongoing advisory and support
- Custom decarbonization roadmap aligned with your reduction targets
- End-to-end compliance documentation for submission and recordkeeping
- Detailed peer benchmarking to evaluate sectoral competitiveness
- Technical training sessions for in-house teams on data management and reporting
- Optional add-on certifications (e.g., ESG, ISO) at marginal cost for enhanced credibility
With our expert support and digitally enabled platform, industrial companies can transform their complicated compliance requirements into a strategic advantage ensuring they not only meet regulatory obligations but also strengthen their position in the market