Who Must Comply with India's Carbon Market Rules?
The Seven Sectors Entering the First Phase
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Introduction
A company checks whether it falls under India's new carbon market and finds two different numbers online: seven sectors and nine sectors, with little explanation of which one applies right now. Compliance teams and suppliers to obligated companies face the same confusion.
The question has an immediate answer. CCTS obligations are already active for FY 2025-26, with the annual emissions data deadline and the start of compliance trading both due within 2026. Getting the sector count wrong risks missing a real filing obligation or spending effort on one that does not yet apply.
This guide sets out the current CCTS obligated entities, which sectors are covered today, how that compares with the scheme's fuller nine-sector design, and how to check your own status.
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What CCTS Obligated Entities Are?
CCTS is India's Carbon Credit Trading Scheme, an intensity-based compliance mechanism established under the Energy Conservation (Amendment) Act, 2022, and administered by the Bureau of Energy Efficiency (BEE). It transitions industrial sectors from the existing Perform, Achieve and Trade (PAT) energy efficiency scheme into a compliance carbon market.
An obligated entity is an installation, not a company, that crosses a sector-specific energy consumption threshold. A company with three plants in a covered sector can have three separate obligated entities, each with its own baseline and target.
Once notified, an obligated entity carries a legally binding greenhouse gas emission intensity (GEI) target. An entity that beats its target earns tradable Carbon Credit Certificates. One that misses it must buy certificates to cover the shortfall or face a penalty.
The scheme is designed around nine sectors in total, but not all nine currently carry active, notified targets. The next section sets out which do.
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The Seven Sectors With Active Obligations
How the seven became active, in two phases?
Targets were notified in two rounds. Aluminium, cement, chlor-alkali, and pulp and paper were notified in October 2025. Petroleum refining, petrochemicals and textiles followed on 16 January 2026, alongside separate targets for secondary aluminium. As a result, compliance obligations are in force for approximately 490 entities across these seven sectors, effective from FY 2025-26, which began 1 April 2025.
What active means in practice?
These seven sectors have legally notified GEI targets right now. Compliance trading has not yet started, but the underlying obligation to meet the target, and to report emissions data, already applies.
Fertiliser and iron and steel: the two sectors still pending
CCTS is designed to cover nine sectors in total. As of the most specific and recently dated reporting available, fertiliser and iron and steel are the two sectors without active, notified targets, leaving them outside current obligations even though they sit within the scheme's design.
On the entity count
The approximately 490 figure for the seven active sectors is repeated consistently across several independently dated sources through mid-2026. A larger figure covering all nine sectors also appears in some secondary sources, but it is not tied to an official BEE list, so this guide does not present it as a confirmed current total.
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How to Check If You Are Covered?
Check your sector first
Confirm whether your sector is among the seven with active, notified targets before anything else.
Check the threshold
Inclusion thresholds carry over from the PAT scheme, so compare your installation's energy consumption against your sector's published threshold.
Confirm your listing directly with BEE
Entity counts vary across secondary sources, so verify your own installation's status on BEE's official obligated-entity list rather than relying on a summarised figure.
Track the annual reporting deadline
Obligated entities submit verified GHG emissions data annually; recent reporting points to a 31 July deadline for the FY 2025-26 cycle, though this should be confirmed against BEE's current notice.
Watch for the remaining sectors
If your installation sits in fertiliser or iron and steel, watch for formal notification of your sector's targets, since current obligations do not yet extend to them. A second tranche of sectors beyond the original nine has also been mentioned in industry reporting, though it is not yet a notified expansion.
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Conclusion
Seven sectors carry active CCTS obligations today. The scheme's fuller nine-sector design is still filling in, with fertiliser and iron and steel the two sectors yet to receive notified targets.
Check your sector and entity status directly against BEE's published list, rather than relying on a secondary summary of the numbers.
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Frequently Asked Questions
Which sectors are covered by CCTS right now?
Aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals and textiles currently carry active, notified CCTS targets.
What is an obligated entity under CCTS?
An obligated entity is an industrial installation in a notified sector that crosses a sector-specific energy consumption threshold and so carries a binding emission intensity target.
How many companies currently have active obligations?
Approximately 490 entities across the seven active sectors currently carry obligations, based on consistent reporting through mid-2026.
Are steel and fertiliser included in CCTS?
They are part of the scheme's nine-sector design, but recent reporting places their targets as still pending rather than active, so this should be confirmed against BEE's current list.
Will more sectors be added to CCTS?
The scheme already plans to extend to fertiliser and iron and steel to reach nine sectors, and some reporting points to further sectors being considered beyond that.
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