Green Credits Are Not Carbon Credits: A Guide to India's Green Credit Programme
A green credit under India's Green Credit Programme cannot be traded, resold, or used as an offset. Here is what the Green Credit Rules, 2023 actually create, what is operational as of mid-2026, and which obligations the instrument can genuinely discharge.
Concinnity Legal | Carbon Markets & Climate Law Practice
If you have been following India's carbon market, "green credit" is an easy phrase to misread. It sounds like a variant of a carbon credit, and it gets discussed in the same rooms and often the same press releases. It is not the same thing, and the difference is not a technicality. A green credit under India's Green Credit Programme cannot be traded, cannot be resold, and cannot be used as an offset. Businesses that plan around it as though it were a carbon asset are planning around the wrong instrument.
Where the Programme Comes From
The Green Credit Rules, 2023 were notified by the Ministry of Environment, Forest and Climate Change on 12 October 2023, under Section 3 of the Environment (Protection) Act, 1986. The Programme sits inside the government's broader Mission LiFE agenda, "Lifestyle for Environment", and gained international visibility two months later when the Prime Minister used the COP28 summit in Dubai to launch a related Global Green Credit Initiative inviting other countries to build a similar model. The domestic Indian scheme, however, is a separate and much more concrete legal mechanism, run entirely at home.
Administration sits with the Indian Council of Forestry Research and Education, based in Dehradun, which registers applicants, verifies outcomes and issues credits. An inter-ministerial Steering Committee sets methodology and policy, and on the ground, State Nodal Officers and Divisional Nodal Officers within each state's forest department identify eligible land and oversee restoration work.
What Is Actually Operating, as Opposed to What Was Announced
The rules name eight activities capable of generating green credits: tree plantation, water management, sustainable agriculture, waste management, air pollution reduction, mangrove restoration, eco-mark label development, and sustainable building and infrastructure. As of mid-2026, exactly one of those eight has a working methodology, an open portal and an actual issuance pathway: tree plantation and eco-restoration on degraded forest land. The rest remain notified in principle but not yet operational, and the programme is being built out sector by sector as methodologies are finalised.
The tree plantation track works like this. State forest departments identify degraded forest parcels, each at least five hectares and free of encumbrances, and list them on a public portal with data on soil, canopy and hydrology. A Green Credit Applicant, which can be a company, an individual, a public sector unit or an NGO, selects a parcel and prepares a detailed project report with the relevant Divisional Nodal Officer. The applicant funds the entire restoration, pays an administrative fee of 10% of the project cost, and signs an MoU committing to survival and canopy targets and six-monthly progress reporting. Commercial use of the land or anything grown on it is not permitted.
A revised methodology released in August 2025 tightened what counts as success. Credits are now issued only after five years of restoration, and only once the site reaches at least 40% canopy density with roughly 1,100 surviving trees per hectare, a meaningfully higher bar than simply having planted trees. Once those benchmarks are verified, typically within sixty days of a claim, the Council issues the credit through its registry, though the applicant's obligations do not end there: maintenance funding and oversight continue for up to ten years.
Why "Credit" Does Not Mean What It Means in a Carbon Market
This is the point most worth getting right. A green credit issued under this programme is non-tradable and non-transferable, with only a narrow exception allowing transfer between a holding company and its own subsidiaries. It can be used exactly once, and only for one of a defined set of purposes: discharging a compensatory afforestation obligation under the Van (Sanrakshan Evam Samvardhan) Adhiniyam, 1980, meeting a CSR commitment, satisfying a tree-plantation condition attached to a project approval, or supporting certain sustainability disclosures. It cannot, notably, be used to satisfy a site-specific green cover obligation, such as the requirement that a mining lease maintain 33% of its area under tree cover.
Set that against what we have written elsewhere about carbon credits, whether Verra-issued VCUs traded on a private registry or Carbon Credit Certificates traded on India's own compliance market under the CCTS. Both of those are built to be fungible: bought, sold, held, and retired against an emissions claim. A green credit is built to do none of that. It is closer to a compliance receipt for a specific piece of ecological restoration than to a market instrument, and there is currently no bridge between the two systems. A business cannot generate green credits and sell them as carbon offsets, and it cannot use a Verra or CCTS purchase to satisfy a compensatory afforestation obligation that specifically calls for a green credit.
What This Means in Practice
The practical question for a business is not "should we get green credits or carbon credits," it is "which obligation are we actually trying to meet." If the goal is a tradable instrument to support an emissions or net-zero claim, the Green Credit Programme is the wrong tool entirely, and the relevant frameworks are the carbon markets we have covered separately. If the goal is discharging a compensatory afforestation requirement, meeting a CSR target through verified restoration, or supporting a sustainability narrative with a government-issued credential rather than a voluntary claim, the Green Credit Programme is genuinely useful, but it needs to be planned on its actual timeline: a five-year minimum before any credit issues, and up to ten years of ongoing maintenance obligation after that.
It is also worth watching for overlap risk. Several states run their own parallel land-restoration or carbon-farming incentive schemes, and commentators have already flagged the possibility of the same land being credited twice, once locally and once nationally, before MoEFCC has fully harmonised the two layers. Any entity relying on a state-level scheme alongside the national Green Credit Programme should confirm how the two interact before assuming both credits are available.
Concinnity Legal advises project developers, corporates and forest departments on structuring Green Credit projects, from the detailed project report stage through to the compensatory afforestation or CSR use of an issued credit, and on how this programme fits alongside any carbon market activity the same client is pursuing. If you are weighing which instrument actually fits your obligation, we are happy to talk it through.
This article is provided for general informational purposes only and does not constitute legal advice. For guidance on a specific project or obligation, please contact Concinnity Legal directly.