Carbon Markets Glossary

Additionality

A project is additional if the emission reductions it generates would not have happened without the carbon credit incentive. It is a core requirement under Verra VCS, Gold Standard, and India CCTS. Regulators reject credits from projects that would have proceeded anyway under normal business conditions.

Article 6 (Paris Agreement)

The section of the Paris Agreement that allows countries to cooperate in meeting their climate targets by transferring emission reductions across borders. Article 6.2 covers bilateral government agreements; Article 6.4 is the multilateral UN-supervised crediting mechanism.

See also: ITMO

Assurance (BRSR)

Third-party verification of BRSR disclosures by an accredited agency. SEBI requires reasonable assurance — equivalent to audit-level scrutiny — for the top 150 NSE/BSE companies. The next 850 companies need only limited assurance. Unverified disclosures are not accepted as BRSR Core.

Baseline Emissions

The level of greenhouse gas emissions that would occur without a carbon reduction project or policy. Credits are issued only for reductions measured against this baseline. Setting an accurate baseline is one of the most technically contested aspects of carbon market methodology.

BEE (Bureau of Energy Efficiency)

India's nodal agency under the Ministry of Power that administers both the PAT Scheme and the Carbon Credit Trading Scheme (CCTS). BEE sets the Greenhouse Gas Emission Intensity (GEI) targets for Designated Consumers and oversees the issuance of Carbon Credit Certificates (CCCs).

BRSR (Business Responsibility & Sustainability Reporting)

A SEBI-mandated disclosure framework for India's top 1,000 listed companies by market capitalisation. Introduced for FY 2022-23, it replaced the older BRR format. BRSR covers nine principles of responsible business conduct — Principle 6 covers environmental disclosures including Scope 1, 2, and Scope 3 emissions.

Carbon Border Adjustment Mechanism (CBAM)

An EU policy that places a carbon price on imports of steel, cement, aluminium, fertilisers, hydrogen, and electricity entering the EU from non-EU countries. Indian manufacturers exporting these products must report embedded emissions quarterly. Full financial obligations begin in January 2027, with the carbon levy tied to the EU ETS allowance price (approximately €62 per tonne in 2026).

Carbon Credit Certificate (CCC)

The tradeable unit under India's Carbon Credit Trading Scheme. One CCC represents one tonne of CO₂-equivalent reduced below a facility's assigned GEI target. CCCs are issued by BEE and traded on power exchanges including IEX Green, HPX, and PXIL.

Carbon Credit Trading Scheme (CCTS)

India's mandatory carbon trading scheme launched in 2025 under the Energy Conservation (Amendment) Act 2022. Administered by BEE under the Ministry of Power. Covers approximately 1,000 large Designated Consumers across steel, cement, aluminium, pulp and paper, fertilisers, petrochemicals, textiles, and other energy-intensive sectors.

Carbon Disclosure Project (CDP)

An international non-profit running the world's largest voluntary environmental disclosure platform. Companies complete annual CDP questionnaires covering climate change, water security, and forests. An A-List score is among the most recognised ESG credentials for institutional investors and procurement teams.

Carbon Footprint

The total greenhouse gas emissions produced directly or indirectly by an individual, organisation, product, or activity — expressed in tonnes of CO₂-equivalent (tCO₂e). A corporate carbon footprint typically covers Scope 1, 2, and Scope 3 emissions as defined by the GHG Protocol.

Carbon Intensity (GEI)

Greenhouse gas emissions per unit of output. Under India CCTS, BEE measures this as Greenhouse Gas Emission Intensity — for example, tCO₂e per tonne of cement produced. Companies must keep their GEI at or below the assigned target to remain compliant.

Carbon Pricing Act (Singapore)

Singapore's primary carbon legislation covering all facilities that emit 25,000 tCO₂e or more per year. Administered by the National Environment Agency (NEA). The carbon tax rate for 2026–2027 is S$45 per tonne, rising to S$65 per tonne by 2030.

CORSIA

Carbon Offsetting and Reduction Scheme for International Aviation — ICAO's mechanism requiring airlines to offset growth in CO₂ emissions above 2019 levels. Approved offset standards include Verra VCS, Gold Standard, and the Article 6.4 mechanism.

Designated Consumer (DC)

An industrial facility obligated under India's Energy Conservation Act because it meets energy consumption thresholds. DCs are subject to both the PAT Scheme (energy efficiency targets) and CCTS (GHG emission intensity targets). Approximately 1,000 facilities qualify across 13 energy-intensive sectors.

Double Counting

The risk that the same emission reduction is claimed by more than one party — for example, by both a host country toward its NDC and a buyer country. Article 6 of the Paris Agreement addresses this through corresponding adjustments, which are deducted from the host country's national inventory when credits are transferred internationally.

Emission Factor

A numerical coefficient used to convert activity data (such as kilolitres of diesel consumed or kWh of electricity purchased) into greenhouse gas emissions. For example, India's national grid electricity emission factor is approximately 0.82 kg CO₂/kWh (CEA, 2023). MintCarb's CarbonSense module includes over 15,000 verified emission factors from CEA India, IPCC, DEFRA, and sector-specific sources.

ESCert (Energy Saving Certificate)

The tradeable unit under India's PAT Scheme. One ESCert represents one metric tonne of oil equivalent (MTOE) saved. ESCerts trade on IEX, HPX, and PXIL. Under the ongoing integration of PAT with CCTS, ESCerts are being progressively converted into Carbon Credit Certificates (CCCs).

EU ETS (Emissions Trading System)

The European Union's mandatory cap-and-trade carbon market — the world's largest by traded volume. It covers power generation, heavy industry, aviation, and (from 2026) maritime transport across EU member states. The annual cap reduces by 4.4% per year under Phase 4 (2021–2030), creating structural scarcity. Settlement price in 2026: approximately €62 per tonne.

EU Allowance (EUA)

The compliance unit in the EU ETS. One EUA = one tonne of CO₂-equivalent. Facilities must surrender one EUA for every tonne of CO₂ they emit above their free allocation. EUAs are traded on ICE Futures Europe and EEX (European Energy Exchange).

GEI (Greenhouse Gas Emission Intensity)

The compliance metric under India's CCTS. GEI is calculated as a facility's total verified GHG emissions divided by its total production output — for example, tCO₂e per tonne of steel produced. BEE assigns a target GEI to each Designated Consumer. Facilities that beat the target earn Carbon Credit Certificates to sell; those that miss it must buy CCCs or face penalties of 1.25× the market price of the shortfall.

GHG Protocol

The global standard for corporate greenhouse gas accounting, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). The Corporate Accounting and Reporting Standard categorises emissions into Scope 1 (direct), Scope 2 (energy indirect), and Scope 3 (value chain). All major frameworks including BRSR, SBTi, TCFD, and CDP are aligned with GHG Protocol methodology.

Gold Standard

A Swiss-based carbon certification standard focused on projects with strong sustainable development co-benefits linked to the UN Sustainable Development Goals. Gold Standard credits typically command a price premium over standard VCS credits because of the additional SDG reporting requirements. Commonly used for renewable energy, clean cooking, and safe water projects.

GRI (Global Reporting Initiative)

The world's most widely used sustainability reporting framework, adopted by over 10,000 organisations in 100+ countries. GRI 305 covers Scope 1, 2, and 3 emissions. India's BRSR framework is partly aligned with GRI Universal Standards. Many large investors and buyers require GRI-compliant reporting as a condition of doing business.

IEX Green (Indian Energy Exchange)

India's largest power exchange and the primary platform for trading CCTS Carbon Credit Certificates, PAT ESCerts, Solar RECs, and Non-Solar RECs. Regulated by the Central Electricity Regulatory Commission (CERC).

ITMO (Internationally Transferred Mitigation Outcome)

The unit of emission reduction transferred between countries under Article 6.2 of the Paris Agreement. ITMOs require a corresponding adjustment in the seller country's national GHG inventory to prevent double counting. Singapore has been among the most active countries in signing ITMO bilateral agreements with Vietnam, Indonesia, Philippines, Cambodia, and others.

Leakage

The unintended increase in emissions in one place as a result of emission reductions achieved in another. For example, if a cement plant reduces production to comply with CCTS targets, and the unmet demand is satisfied by imports from a country with no carbon price, the emissions simply shift — they are not actually reduced globally.

MRV (Measurement, Reporting & Verification)

The three-step process at the heart of every credible carbon market. Emissions or reductions must be Measured using approved methodologies, Reported to the relevant authority (BEE, NEA, registry), and Verified by an accredited independent third party. No MRV — no credit. MintCarb's CarbonVerify module manages the full MRV workflow.

Net Zero

Achieving net zero means the total greenhouse gases added to the atmosphere by an organisation equals the amount removed or neutralised. SBTi's Corporate Net-Zero Standard requires at least a 90% absolute reduction in Scope 1, 2, and 3 emissions before any residual emissions may be neutralised through carbon removals. 'Carbon neutral' is not the same as net zero — it typically involves offsetting without the deep reduction requirement.

NDC (Nationally Determined Contribution)

Each country's self-declared climate action plan under the Paris Agreement, submitted to the UNFCCC. India's NDC targets 45% reduction in GDP emission intensity by 2030 and 500 GW non-fossil fuel capacity. Singapore's NDC targets peak emissions before 2030 and net zero by 2050.

PAT Scheme (Perform Achieve & Trade)

India's energy efficiency trading scheme for designated energy-intensive industries. Facilities that exceed their energy savings targets earn ESCerts to sell; under-performers must buy ESCerts or pay penalties. Currently in Cycle VII (2023–2026). PAT is being integrated with CCTS under India's unified carbon market framework.

Permanence

The guarantee that an emission reduction will last and will not be reversed. Permanence is especially challenging for nature-based carbon projects — forests can be destroyed by wildfires, disease, or political change. Standards like Verra VCS maintain a buffer pool of non-tradeable credits to compensate for reversals.

REC (Renewable Energy Certificate)

A tradeable certificate in India proving that 1 MWh of electricity was generated from a renewable energy source (solar, wind, hydro, or biomass). RECs are relevant for Scope 2 market-based emission reporting and for meeting Renewable Purchase Obligations (RPO) under SERC rules. Solar RECs and Non-Solar RECs trade on IEX, HPX, and PXIL.

Retirement (of carbon credits)

The permanent cancellation of a carbon credit after it is used to claim an emission offset. Once retired, a credit is removed from the registry and cannot be resold or reused. MintCarb issues a publicly verifiable Retirement Certificate for every credit retired on the platform.

REDD+

Reducing Emissions from Deforestation and Forest Degradation — a UN framework that provides financial incentives to developing countries for preserving forests. REDD+ credits are among the most traded voluntary carbon credits globally, though they face ongoing scrutiny around additionality and permanence.

SBTi (Science Based Targets initiative)

A partnership between CDP, UN Global Compact, WRI, and WWF that validates corporate emission reduction targets as scientifically consistent with the Paris Agreement. SBTi targets must cover Scope 1 and 2 (and significant Scope 3) emissions. Approved companies must reduce absolute emissions by at least 42% by 2030 (1.5°C pathway). Over 7,000 companies globally have set or committed to SBTi targets.

Scope 1 Emissions

Direct greenhouse gas emissions from sources owned or controlled by the reporting company. Examples for a cement manufacturer: kiln combustion (coal, pet coke), on-site diesel generators, company vehicles, and process emissions from limestone calcination — the largest single source in cement production.

Scope 2 Emissions

Indirect greenhouse gas emissions from the generation of purchased electricity, steam, heat, or cooling consumed by the reporting company. Scope 2 can be reported location-based (using national grid average emission factors) or market-based (using RECs or supplier-specific factors). India's market-based Scope 2 accounting is increasingly important for BRSR Core.

Scope 3 Emissions

All other indirect greenhouse gas emissions across a company's value chain — both upstream (raw material extraction, purchased goods and services, business travel, employee commuting) and downstream (use of sold products, end-of-life treatment, leased assets, investments). Scope 3 typically accounts for more than 70% of a company's total climate impact but is often the hardest to measure.

TCFD (Task Force on Climate-Related Financial Disclosures)

A framework created by the Financial Stability Board to guide companies in disclosing material climate risks to investors and lenders. The four pillars are Governance, Strategy, Risk Management, and Metrics & Targets. TCFD reporting is now mandatory or formally expected for large companies in the UK, EU, Singapore, and increasingly India (through BRSR alignment).

tCO₂e (Tonnes of CO₂-equivalent)

The universal unit for measuring greenhouse gas emissions. Different gases are converted to their carbon dioxide equivalent using their Global Warming Potential (GWP) over 100 years. Methane (CH₄) has a GWP of approximately 28; nitrous oxide (N₂O) has a GWP of approximately 265. All carbon market prices, targets, and penalties are quoted in tCO₂e.

VCM (Voluntary Carbon Market)

The global market where companies, governments, and individuals buy and sell carbon credits to meet voluntary sustainability commitments — outside of mandatory compliance regimes. Credits are issued by independent standards including Verra, Gold Standard, and ICR. The VCM is expected to grow from approximately $2 billion today to $50 billion by 2030 according to MSCI and BloombergNEF estimates.

Verra / VCS (Verified Carbon Standard)

The world's most widely used voluntary carbon standard, administered by Verra (Washington DC). VCS credits (called Verified Carbon Units or VCUs) are issued for a broad range of project types including forest conservation (REDD+), renewable energy, improved cookstoves, and blue carbon. Over 1 billion VCUs have been issued since 2006.

Vintage

The year in which the emission reduction represented by a carbon credit actually took place. Older vintages typically trade at a discount because buyers increasingly prefer recent, credible reductions. Most institutional buyers set a policy requiring credits with a vintage no older than five years.