Two schemes, one lineage

Companies sourcing from or operating in India's energy-intensive sectors will eventually run into two acronyms that look unrelated but are not: PAT and CCTS. PAT (Perform, Achieve, Trade) is the older energy-efficiency trading scheme run under India's energy conservation framework. CCTS (Carbon Credit Trading Scheme) is the newer compliance carbon market, also administered under the amended Energy Conservation Act, with the Bureau of Energy Efficiency (BEE) involved in its administration. The relationship is not one of replacement. CCTS is built on top of PAT's existing infrastructure, and understanding that lineage helps explain what CCTS can and cannot do in its current form.

What PAT measured

PAT worked by giving large energy-consuming facilities — the scheme calls them designated consumers — specific energy-consumption targets relative to their output. Facilities that beat their target could earn tradeable certificates; facilities that missed it had to buy certificates or otherwise close the gap. The unit of account was energy, not emissions. A steel plant or a cement kiln under PAT was being measured on how much energy it used per tonne of product, not on how much carbon dioxide equivalent it emitted per tonne.

That distinction matters more than it sounds. Energy efficiency and emissions intensity move together most of the time, but not always — the carbon intensity of the specific fuel or grid electricity a facility uses can shift independently of how efficiently it uses that energy. A scheme built purely around energy consumption has a structural blind spot around fuel-switching and grid decarbonisation.

What CCTS extends

CCTS is designed to close that gap. Obligated entities under CCTS — concentrated in the same energy-intensive sectors PAT already covered — are given GHG emissions-intensity targets rather than energy-intensity targets. This is an important structural detail: CCTS sets intensity targets, not an absolute emissions cap. A facility can grow output and still meet its target as long as it keeps emissions per unit of output within the assigned intensity band. That design mirrors the shape of PAT's original mechanism (targets tied to output, tradeable certificates for over- or under-performance) but swaps the underlying metric from energy to greenhouse gas intensity.

In practice this means CCTS is best understood as PAT's measurement and reporting apparatus extended to cover a broader unit of account. The designated consumers, the monitoring, reporting, and verification (MRV) processes, and the institutional role of BEE do not need to be built from scratch. They are being repurposed and widened.

Why shared MRV infrastructure matters

For any compliance carbon market to function, the MRV layer has to be credible: facilities need consistent methods for measuring output, energy use, and now emissions, and a verification process regulators and counterparties trust. Building that layer from nothing is slow and expensive. India's advantage in standing up CCTS is that PAT already forced thousands of designated consumers through multiple cycles of energy data reporting and verification. That reporting discipline, and the relationships between facilities, auditors, and BEE, transfer directly into CCTS's GHG-intensity reporting requirements.

This matters beyond India's domestic compliance market. For any company using the GHG Protocol's Scope 3 data quality hierarchy — moving from spend-based estimates up through average-data and hybrid methods to supplier-specific primary data — the existence of a mature MRV infrastructure at Indian suppliers is a genuine asset. A steel or aluminium supplier that has been reporting energy and (now) emissions intensity under a verified compliance scheme for years is far better positioned to provide credible facility-level emissions data than one with no reporting history at all. That's a direct lever for improving Category 1 (Purchased Goods & Services) data quality for buyers with Indian supply chain exposure.

Where this intersects with CBAM

The sectoral overlap is not a coincidence. CCTS's obligated sectors sit close to the sectors covered by the EU's Carbon Border Adjustment Mechanism — iron and steel, aluminium, cement, fertilisers, hydrogen, and electricity. Exporters in these sectors already need to report embedded emissions on imports into the EU, calculated on the actual production route where possible and falling back to conservative default values otherwise. A domestic Indian facility that is already measuring and verifying GHG intensity under CCTS has a head start on producing the actual-emissions data that CBAM increasingly expects, rather than relying on the EU's more punitive default reference values.

What this means for buyers and reporters

For companies building Scope 3 inventories with Indian suppliers in energy-intensive categories, three practical points follow from this lineage:

  1. Ask suppliers whether they are PAT designated consumers and, separately, whether they now fall under CCTS — the two lists overlap but are not identical, and each carries different reporting obligations.
  2. Treat verified CCTS-reported intensity data as a stronger primary-data source than spend-based or generic industry-average factors, provided the reporting boundary matches your inventory needs.
  3. Watch for CCTS to keep maturing toward a definitive regime with tighter verification, which should over time make supplier-specific data easier to obtain and more comparable across facilities.

The short version: PAT built India's industrial energy-reporting muscle memory. CCTS is asking that same muscle to do a harder job — full GHG intensity instead of energy alone — without having to relearn how to report in the first place.