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MoEFCC Green Credit Rules 2023


Introduction: Green Credit Rules 2023

The Government of India has introduced the Green Credit Rules of 2023 to incentivize environmentally positive actions. These rules are the key to unlocking a sustainable solution for a brighter future. With these rules in place, companies and individuals will be incentivized to adopt green practices. Renewable energy projects, sustainable infrastructure, and eco-friendly businesses will become the norm. Not only will this help combat climate change, but it will also provide great opportunities for growth and innovation. It is crucial to understand the power of green credit rules and their potential to reshape the country's circular economy. By embracing sustainability and incorporating it into our everyday lives, we can create a brighter future for ourselves and future generations. Let's explore the provisions of green credit rules and discover their possibilities for a sustainable and prosperous future.

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What is Green Credit?

'Green Credit' means a singular unit of an incentive provided for a specified activity, positively impacting the environment. Whenever an individual or institution acts positively to benefit the environment, the activity is credited to him as green credit. Green Credits earned in such a manner are then made available in the market and transferred from one entity to another by trading.

Importance of Sustainable Financing

Sustainable Financing is a new term used to describe the awareness of government and business institutions regarding the sustainable goals of the country. The stakeholders together need to come and support the initiatives that digitize the efforts made to improve our overall environment. These activities include tree plantation, water management, reduction of air pollution, etc. Considering the pollution caused by industries daily, it becomes necessary to consider implementing effective financial mechanisms that encourage and incentivize environmentally friendly practices. Green credits are a powerful tool to promote and facilitate investments in sustainable projects and initiatives in this scenario. By providing tangible economic benefits and incentives for environmentally positive actions, green credits encourage industries to adopt cleaner technologies, invest in renewable energy, and implement sustainable waste management practices.

Key Objectives of Green Credit Rules

The rules were introduced under 'Green Credit Programme Implementation Rules 2023' in June 2023. On 12th October 2023, the rectified Green Credit Rules are now notified. Throughout the process, these rules carry the following key objectives-

  • Incentivizing Environmentally Positive Actions

The primary goal of the Green Credit Program is to incentivise actions that positively impact the environment. This is achieved through a market-based mechanism where participants are rewarded with green credits for undertaking specific environmentally friendly activities.

  • Creation of Tradable Green Credits

The program is designed to generate green credits based on environmentally conscious actions undertaken by individuals or entities. These green credits are made tradable on a domestic market platform, allowing those who have earned them to trade or sell them to other entities in the market.

  • Encouraging Compliance and Voluntary Measures

The Green Credit Program encourages industries, companies, and other entities to fulfil their environmental obligations as existing laws require.

  • Exclusion of Tradable Obligation-based Credits

The green credits generated or acquired to fulfil legal obligations cannot be traded. It ensures that the program remains focused on incentivizing voluntary environmental actions.

What are the Main Features of the Green Credit Program?

The Green Credit Rules aim to implement the Green Credit Program in the country. The major points for the program are as follows-

  • It is open to individuals and entities, promoting activities for environmental protection.
  • It encompasses activities such as tree plantation, water management, sustainable agriculture, waste management, air pollution reduction, mangrove conservation, ecomark label development, and sustainable building construction.
  • Participants are required to register their environmental initiatives with the Administrator through the designated website.
  • Verification of the registered activities is conducted by a designated agency which assesses the activities based on specific guidelines and submits a comprehensive report to the Administrator.
  • The Administrator then reviews the report and verifies the authenticity of the initiatives undertaken by the applicant, followed by issuing the Green Credit Certificate.
  • The program aims to incentivize and recognize proactive measures taken for environmental conservation and sustainability.
  • By emphasizing sustainable practices, the program encourages the adoption of eco-friendly technologies and materials in various industrial sectors.
  • The Green Credit program serves as a mechanism to foster a more environmentally conscious and responsible approach to development and resource management.

Authorities Involved in Green Credit Trading

The following authorities are involved in implementing the Green Credit Rules. The rules prescribe the constitution of the following authorities under which the trading of Green Credit will take place and be monitored-

  • Administrator

The Indian Council of Forestry Research and Education holds the role of the Administrator. This body oversees the comprehensive execution of the Green Credit programme.

  • Steering Committee

The Steering Committee is entrusted with monitoring the implementation of the Green Credit programme. Its responsibilities include determining the activities and sectors to be included in the Green Credit programme and addressing any matters referred to by the Central Government.

  • Technical Committee

The Technical Committee plays a critical role in assisting the Administrator. It is responsible for developing methodologies for calculating Green Credits and establishing mechanisms for registration, verification, and evaluation processes for each activity under the program.

  • Green Credit Registry

The Green Credit Registry serves as an electronic database for the registration and issuance of each Green Credit. Its functions include-

  1. Registering activities and issuing Green Credits.
  2. Ensuring accurate accounting of credit issuance.
  3. Maintaining a secure database with necessary security protocols.

Challenges in Implementing Green Credit Rules

The Green Credit Rules are still in the initial stage and require commitment and determination from the stakeholders. The major challenges are as follows-

  • Establishing Clear Criteria for Environmental Impact Assessment

Defining clear and universally acceptable criteria for assessing the positive impact of specific activities on the environment is a crucial challenge. The implementation process requires a standardized method for measuring and evaluating the environmental benefits resulting from each activity to issue accurate green credits.

Read Our Blog: Importance Of Environmental Impact Assessment In India

  • Ensuring Consistent Compliance and Participation

Encouraging industries, companies, and individuals to engage in environmentally friendly actions, especially voluntary ones, requires robust awareness campaigns and continuous efforts to demonstrate the program's benefits.

  • Monitoring and Preventing Fraud

Implementing the Green Credit Rules necessitates a strong system for monitoring and preventing fraudulent activities, including the misuse or manipulation of green credit issuance. Implementing stringent auditing processes and ensuring transparency throughout registration, verification, and credit issuance will be critical to maintaining the program's integrity.

  • Market Stability and Price Regulation

Managing market stability and regulating the prices of green credit units are essential challenges. The program needs mechanisms to prevent price manipulation, market volatility, and speculative trading activities. Creating measures to stabilize the market and ensure that the value of green credits accurately reflects the actual environmental benefits of the corresponding activities is crucial for the program's effectiveness.


In conclusion, the Green Credit Rules 2023 marks a significant step toward incentivizing environmentally positive actions and reshaping financial systems for a sustainable future. These rules present the potential for a transformative shift, where environmentally conscious investments become a priority, and projects fostering ecological benefits receive favourable credit terms. As industries and individuals embrace green practices, we can anticipate widespread adoption of renewable energy, sustainable infrastructure, and eco-friendly business models. However, implementing the Green Credit Rules successfully faces several challenges, including the assessment, compliance, trust and the green credit economy. Mitigating these challenges requires a collaborative effort from stakeholders, which can be the promotion of green credits through awareness campaigns, incentives, transparent market platforms, and strategic partnerships with businesses. By embracing sustainability and integrating it into our daily lives, we can pave the way for a more sustainable and prosperous future for future generations.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.


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Yash Chauhan is a law graduate from the University of Delhi and a skilled content writer at Corpseed. With a keen interest in the legal industry, he specializes in writing articles on contemporary legal developments, corporate compliances,...

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