Examine the transition from the PAT scheme to the Carbon Credit Trading Scheme (CCTS) in India's industrial energy policy.

India's industrial decarbonisation architecture is shifting from managing energy intensity to pricing carbon itself: the Perform, Achieve and Trade (PAT) scheme under the Energy Conservation Act, 2001 is being succeeded by the CCTS, notified in June 2023 under the Energy Conservation (Amendment) Act, 2022 [1][3].

What PAT built

• Assigned mandatory Specific Energy Consumption (SEC) reduction targets to Designated Consumers in energy-intensive sectors, in three-year cycles [2].
• Created India's first industrial market instrument — ESCerts for excess savings, traded on power exchanges [2].
• Cycle VII notified 509 Designated Consumers with a 6.627 MTOE savings target, alongside a monitoring, audit and energy-manager ecosystem that CCTS now inherits [2].

What changes under CCTS

• Targets shift from energy use per unit of output to Greenhouse Gas Emission Intensity (GEI), so fuel-switching, renewable electricity and process change count — not efficiency alone [1].
• New institutional design: a National Steering Committee co-chaired by the Power and Environment Ministries, BEE as administrator and Grid India as registry [1].
• A dual structure — a compliance mechanism for obligated entities plus an offset mechanism opening participation to non-obligated players [1].
• Sectors including aluminium, cement, chlor-alkali, petrochemicals, refineries, pulp and paper and textiles have transitioned from PAT [1].

Unresolved concerns

• PRS flagged that the parent legislation left unclear who regulates carbon credit trading, unlike SEBI or CERC for other markets [3].
• Loose baselines risk over-allocation and weak price signals, blunting the incentive to invest.
• MSMEs, largely outside the obligated list, need non-market support — hence the ADEETIE scheme (2025, ₹1,000 crore, 60 clusters, 14 sectors) offering interest subvention and audits [4].

The transition is thus evolutionary, not disruptive — PAT's measurement backbone underpins CCTS. Credible baselines, a clear market regulator and parallel MSME handholding will determine whether India's carbon market genuinely advances its net-zero-by-2070 pledge.