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PIB Summaries 21 May 2024

  1. Green Credit Programme


The Centre has approved 12 greening projects under the Green Credit Program (GCP) and estimates of 24 plans submitted by different state forest departments are under consideration.


GS III: Environment and Ecology

Dimensions of the Article:

  1. Green Credit Programme
  2. Green Credit Rules, 2023: Overview
  3. Compensatory Afforestation: Overview

Green Credit Programme:

  • The Green Credit Programme introduces a system of incentives, known as “Green Credits,” for activities that have a positive impact on the environment.
  • It complements the domestic Carbon Market in India, expanding beyond CO2 emission reductions to incentivize a wider range of sustainable actions.
  • The Green Credit System aims to meet various environmental obligations, encouraging companies, individuals, and local bodies to undertake sustainable initiatives.
  • Unlike the carbon market’s focus on CO2 emissions, the Green Credit Programme promotes broader environmental goals.
Tradable Credits:
  • Green credits earned through sustainable activities will be tradable, allowing participants to sell them on a proposed domestic market platform.
  • This creates a market-based approach to incentivize and reward environmentally beneficial actions.
Program Administrator:
  • The Indian Council of Forestry Research and Education (ICFRE) will serve as the administrator of the Green Credit Programme.
  • ICFRE will develop guidelines, processes, and procedures for the implementation of the programme, ensuring its effectiveness and integrity.

Green Credit Activities:

The programme promotes a range of activities that contribute to environmental sustainability, including:

  • Increasing Green Cover: Promoting tree plantation and related activities to enhance the green cover across the country.
  • Water Conservation: Encouraging water conservation, water harvesting, and efficient water use, including the treatment and reuse of wastewater.
  • Regenerative Agriculture: Promoting natural and regenerative agricultural practices and land restoration to improve productivity, soil health, and the nutritional value of food produced.
  • Waste Management: Supporting sustainable waste management practices, including collection, segregation, and treatment.
  • Air Pollution Reduction: Encouraging measures to reduce air pollution and other pollution abatement activities.
  • Mangrove Conservation: Promoting the conservation and restoration of mangroves, important ecosystems for coastal areas.
  • Ecomark Label: Encouraging manufacturers to obtain the “Ecomark” label for their goods and services, signifying their environmental sustainability.
  • Sustainable Infrastructure: Encouraging the construction of buildings and infrastructure using sustainable technologies and materials.
  • Setting Thresholds and Benchmarks: The Green Credit Programme will establish thresholds and benchmarks for each specific Green Credit activity, ensuring clear standards and targets for participants to achieve.

Green Credit Rules, 2023: Overview

Notification and Legal Basis

  • Introduced on 12th October 2023 under the Environment Protection Act of 1986.


  • Establish a mechanism promoting voluntary environmental actions leading to the issuance of green credits.
  • Initial focus on voluntary tree plantation on degraded land, waste land, watershed areas, etc., managed by Forest departments.
Implementation of the Green Credit Program (GCP)

Afforestation Financing

  • Registered and approved entities can finance afforestation projects in designated degraded forest and wasteland areas.
  • Afforestation activities will be executed by State Forest departments.

Green Credit Valuation

  • Two years post-planting, each tree undergoes evaluation by the International Council of Forestry Research and Education (ICFRE).
  • Each planted tree can potentially earn one ‘green credit’.

Utilization of Green Credits

  • Companies that have converted forest land for non-forest uses and removed numerous trees can use green credits to fulfill obligations under India’s compensatory afforestation laws.

Available Land for Green Credit Projects

  • 10 States have identified approximately 3,853 hectares of degraded forest land for individuals, groups, and public/private sector units to earn and potentially trade green credits.
    • Chhattisgarh and Madhya Pradesh (MP) together represent about 40% of the available forest land.

Compensatory Afforestation: Overview


  • Compensatory afforestation mandates industries or institutions, permitted to clear forest land for non-forestry purposes,
    • Provide equivalent non-forest land to forest authorities, and
    • Fund afforestation on the provided land.
  • Land must ideally be near the cleared forest tracts.
  • If unavailable, twice the amount of ‘degraded’ forest land can be used for afforestation.

Additional Compensation

  • Companies must compensate for the lost forest ecosystem’s value, known as the ‘net present value’, due to land diversion.
Issues with Compensatory Afforestation and the Green Credit Program (GCP)


  • Obtaining contiguous non-forest land for compensatory afforestation, particularly in States like Chhattisgarh and Madhya Pradesh with historical land diversions for mining.
  • The Compensatory Afforestation Fund, funded by environmental compensation from companies, has substantial unspent funds due to land availability issues.

Green Credit Challenges

  • Assigning a monetary value to green credits is problematic.
  • Linking green credits to compensatory afforestation activities is complex.

June 2024