Green Credit

01.09.2025

Green Credit
 

Context
 The Ministry of Environment, Forest and Climate Change has released a revised methodology for calculating Green Credit under the Green Credit Programme.

About Green Credit Methodology

What it is:
Green Credit is a market-based incentive designed to reward voluntary environmental actions such as tree plantation, mangrove restoration, sustainable agriculture, water conservation, and waste management. It provides measurable recognition for positive ecological outcomes.

Aim:

• Promote voluntary participation by industries, cooperatives, and communities in ecological restoration.
   
• Shift focus from mere tree-counting to actual ecological improvement (survival and canopy density).
   
• Link corporate obligations like CSR and afforestation compliance with long-term environmental benefits.
   

Key Features :

• Credits awarded only after 5 years of restoration to ensure survival and growth.
   
• Minimum canopy density of 40% required for issuance.
   
• 1 Green Credit = 1 surviving tree beyond 5 years.
   
• Credits are non-tradable and non-transferable, except within holding–subsidiary companies.
   
• Can be exchanged once only for compensatory afforestation, CSR compliance, or project-linked obligations; extinguished after use.
   
• Verification conducted by designated agencies; applicants pay a verification fee.
   
• Projects started under 2024 rules will continue under the old provisions.
   

Significance:

• Focuses on long-term survival and real ecological impact, not just plantation numbers.
   
• Encourages quality afforestation and restoration of degraded lands.
   
• Supports companies in meeting CSR, ESG, and legal compliance through scientifically verified credits.

Conclusion:

The revised Green Credit methodology ensures tree plantations deliver tangible ecological benefits through verified survival and canopy growth. By linking corporate obligations with long-term environmental outcomes, it promotes sustainable restoration, accountability, and quality afforestation, strengthening India’s commitment to ecological resilience.