2025 for January 1970

The Union Environment Ministry has recently notified a new methodology for awarding green credits under the Green Credit Programme (GCP).
This replaces the earlier methodology, with significant changes in eligibility, time frame, and use of credits.

Launched: In November 2023, at the UN Climate Conference (COP28, Dubai) by the Prime Minister of India.
Objective: To promote voluntary environmental protection actions such as tree plantation, water conservation, waste management, etc.
Mechanism: Under GCP, the environment ministry seeks ‘voluntary actions’ from companies, individuals, or groups for environmental protection activities, and awards credits in return.

Awarding of credits:
- Earlier system: The earlier benchmark awarded green credit subject to a minimum density of 1,100 trees per hectare, within two years of plantation. It is criticized for not focusing on survival, and quality and density of canopy.
- New methodology:
  - Those who have invested in tree plantation activities will earn green credits on completion of a minimum of five years of restoration activities on degraded forest land.
  - The green credit shall be calculated based on the vegetation status, including the change in the canopy density (after achieving a minimum canopy density of 40%) and the number of surviving trees.
Tradability of credits:
- Earlier system: Market-based trading of credits.
- New methodology: The credit for tree plantation will be non-tradable and non-transferable, except in the case of transfer between the holding company and its subsidiary companies.
Permissible uses of green credits:
- Those involved in tree plantation under GCP will still be allowed a one-time exchange of green credit for compensatory afforestation obligations,
  - To meet corporate social responsibility requirements or
  - For other legal tree planting obligations.
- The credit will cease after exchanging it for compliance with legal obligations.
- The credit for tree plantation may be used for reporting under environmental, social, and governance (ESG) leadership indicators.

Focus on quality and survival:
- Moves away from just counting trees per hectare.
- Emphasizes long-term health of plantations (minimum 5 years).
- Addresses criticism of government afforestation drives that focus on quantity over survival and canopy quality.
Focus on credibility:
- So far, 57,986 hectares of degraded forest land have been registered under GCP, as per government data.
- Revised rules expected to improve credibility and long-term sustainability.

The revised Green Credit Programme marks a shift from tokenistic tree-plantation drives to sustainable ecological restoration with a focus on quality, survival, and canopy growth.
Going forward, this approach can strengthen India’s climate resilience, improve biodiversity, and enhance corporate accountability in environmental stewardship.

Source: IE

Green Credit Programme (GCP) FAQs

Q1: Why has the Union Environment Ministry revised the methodology of awarding green credits under the Green Credit Programme (GCP)?

Ans: To ensure focus on long-term tree survival and canopy density rather than short-term plantation targets.

Q2: What are the key conditions for awarding green credits for tree plantation under the new rules of GCP (2025)?

Ans: Credits will be awarded after 5 years, based on a minimum canopy density of 40% and verified tree survival.

Q3: How does the revised GCP address the criticism of earlier afforestation and plantation initiatives in India?

Ans: By shifting from a tree-count benchmark (1,100 per hectare) to quality indicators like canopy density and growth.

Q4: What is the significance of restricting green credits under GCP as non-tradable and non-transferable?

Ans: It prevents commercial speculation, while allowing use mainly for CSR, legal obligations, or ESG reporting.

Q5: In what way can the GCP contribute to India’s climate commitments and sustainability goals?

Ans: By incentivising voluntary ecological restoration on degraded lands, enhancing carbon sequestration and biodiversity.