India’s Green Credits Programme (GCP), launched to foster voluntary environmental actions like afforestation, water conservation, waste management, and sustainable farming, establishes a market-driven approach to incentivize eco-conscious efforts. Notified on October 12, 2023, under the Environment (Protection) Act of 1986, the initiative encourages industries, organizations, and individuals to fulfill legal environmental obligations or undertake voluntary green measures by earning or purchasing green credits.
Managed by the Indian Council of Forestry Research and Education (ICFRE), an autonomous entity under the Ministry of Environment, Forests, and Climate Change (MoEFCC), the Green Credits Programme operates through a structured process. Participants—ranging from individuals to corporations or public sector units—register eco-projects, such as afforestation on degraded lands, with the ICFRE. State forest departments assign appropriate land (minimum 5 hectares) and implement the activities using participant funding. After two years, the ICFRE assesses outcomes, such as tree survival and growth, and assigns green credits based on established criteria. For instance, one tree meeting the requirements equals one green credit, with a minimum planting density of 1,100 trees per hectare.
These credits can be traded on a domestic platform, enabling participants to sell them to entities aiming to comply with obligations like compensatory afforestation under the Forest Conservation Act or meet Environmental, Social, and Governance (ESG) requirements set by the Securities and Exchange Board of India (SEBI).
As of April 2025, 25,654 hectares of land have been registered for eco-restoration, with 21,988 hectares allocated to over 384 participants. Public Sector Undertakings (PSUs) in sectors like Coal, Oil & Gas, and Power lead participation, with Indian Oil Corporation (14,248 hectares), Power Grid Corporation of India Ltd (4,372 hectares), and NTPC Limited (1,853 hectares) at the forefront.
While the Green Credits Programme is a forward-thinking initiative, unresolved complexities create uncertainty for participants and experts. Addressing these gaps is critical to building trust, encouraging participation, and ensuring sustained impact.
The February 2024 tree plantation methodology, simplified from its earlier draft, lacks detail on survival rates, project duration, and ecological objectives. A robust methodology is essential to prevent suboptimal outcomes and maintain participant confidence.
Tree survival rates vary widely and can be low without proper care. The GCP currently lacks clear guidelines for sapling maintenance during the two-year growth phase or ensuring long-term survival, which must be addressed.
The GCP must clarify its distinction from carbon credits and implement safeguards to prevent entities from claiming both green and carbon credits for the same project. Such ambiguities could undermine market trust and deter participation.
While the draft methodology suggests species based on state rainfall patterns, afforestation must account for local ecosystems to avoid low survival rates or monoculture risks. Careful planning is crucial for ecological success.
Given the program’s scale and complexity, a dedicated regulatory body is needed to conduct site audits, accredit third-party overseers, and enforce penalties for non-compliance or fraud.
Although the Green Credit Rules, 2023, outline eight eligible activities, the GCP currently emphasizes afforestation. Expanding to include other initiatives would allow participants to balance environmental priorities with other objectives, increasing program flexibility.
