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Green Credit Programme : What the Programme Entails

Green Credit Programme: What the scheme entails

Written by Nikhil Ghanekar

New Delhi | April 2, 2025

The Green Credit Programme (GCP) rolled out by the Ministry of Environment, Forest and Climate Change in 2023 was flagged by the Ministry of Law and Justice before its rollout, over legality of the business model built into it.

The ambitious government scheme seeks to invite voluntary participation in sectors ranging from plantations to water conservation in exchange of tradable credits. At present, the pilot on tree plantation and eco-restoration of degraded lands is underway.

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What is the Green Credit Programme?

Prime Minister Narendra Modi and Sheikh Mohammed bin Zayed Al Nahyan, the President of the UAE, officially unveiled the GCP on December 1, 2023, during the annual United Nations climate conference in Dubai. It was dubbed as a mechanism to incentivise “pro-planet” actions in response to climate change, and one which would promote the Centre’s Mission LiFE (Lifestyle for Sustainable Environment).

Green Credit Programme

The Union Environment Ministry notified the Green Credit Rules, which spelt out the programme’s objectives and implementation, in October 2023.

At its core, the GCP seeks voluntary participation (read investments) of individuals, companies, industries, and other entities across seven different activities — such as tree plantation, waste management, and water conservation — that will lead to improvements in the environment. This participation will be incentivised by generating “green credits”, which can then be traded on a domestic market platform to potential buyers looking to meet sustainability targets, or existing legal obligations.

For instance, could be exchanged for meeting compliance of compensatory afforestation, in cases where forest land has been used for development projects, as per a February 2024 notification spelling out the methodology for calculating green credits.

The credits can also be used by listed companies as part of their environmental, social and governance disclosures under SEBI’s Business Responsibility and Sustainability framework, indicating efforts taken by these companies on environmental sustainability.

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How will green credits be calculated?

To begin with, the Centre has rolled out the scheme through the pilot on tree plantation, which was later expanded to eco-restoration activities such as plantation of shrubs, herbs and grasses, soil moisture conservation, rain water harvesting, and other similar measures as per site suitability.

Under GCP pilot on tree plantation and eco-restoration, the Indian Council of Forestry Research and Education, Dehradun, will act as the nodal administrator. Plantations will be carried out in degraded land parcels including open forest, scrubland, wasteland and catchment areas, and they must be five hectares in size or above.

Forest departments of states and Union Territories would have to identify these land parcels, which are under their control. Any party interested in participating would have to apply and register with ICFRE. After processing the applications and charging a fee, the land parcels identified by forest departments would be allotted to the parties. It would be the forest department’s responsibility to carry out and maintain the tree plantations, and the plantation would have to be completed within a period of two years after the money is paid. Credits: The Indian Express, April 2 2025

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Q1. Read the passage given below and answer the following questions:

1. What was the main concern raised by the Ministry of Law and Justice before the rollout of the Green Credit Programme? a) Lack of forest land for plantation b) Legal validity of its business model c) International interference in the scheme d) High cost of implementation
   

2. Complete the sentence:The Green Credit Programme aims to encourage voluntary participation in environmental activities in exchange for __________.
   

3. The programme was officially launched during: a) COP26, Glasgow b) World Environment Day, 2022 c) The annual UN climate conference, Dubai, 2023 d) India Climate Summit, 2023
   

4. What is the objective of the Green Credit Programme according to the passage?
   

5. True or False:The pilot phase of the GCP focuses on industrial waste recycling.
   

6. Mention any two activities included under the Green Credit Programme.
   

7. The Green Credits generated can be traded by companies to fulfill:a) Export obligationsb) Forest clearance compensations or ESG disclosuresc) Tax exemptionsd) Social welfare projects.
   

8. How does the Green Credit Programme promote collaborative efforts between government agencies and private stakeholders?
   

9. Imagine you are an environmental officer in your state. How would you encourage local industries to register under the Green Credit Programme? Suggest one strategy based on the passage.
   

10. Find the word from the passage which means “to reward or motivate with an incentive.” ________________________________________________________ Answer Key: Green Credit Programme
    

    1. b) Legal validity of its business model

    2. tradable credits

    3. c) The annual UN climate conference, Dubai, 2023

    4. The Green Credit Programme aims to incentivize voluntary participation in environmentally beneficial activities by individuals, companies, and institutions through tradable green credits.

    5. False(The pilot focuses on tree plantation and eco-restoration, not industrial waste recycling.)
    

    1. 6.Any two of the following activities:

       • Tree plantation

       • Water conservation

       • Waste management

       • Eco-restoration (e.g., planting shrubs, soil moisture conservation)b) Forest clearance compensations or ESG disclosures. Q7.b) Forest clearance compensations or ESG disclosures
         

       Q8. The Green Credit Programme encourages collaboration by allowing forest departments to identify land and manage plantations, while private stakeholders fund the initiatives and gain tradable credits. This shared responsibility promotes effective public-private partnerships.
       

       Q9. As an environmental officer, I would create awareness workshops and highlight the benefits of earning tradable green credits, such as fulfilling sustainability goals and enhancing ESG ratings, to motivate industries to participate.
       

       Q10. Incentivise