Centre notifies new norms for Green Credit, ties it to canopy density

In a new norm, Centre has notified that only on completion of minimum five years of restoration activities in the degraded forest land, and after achieving a minimum canopy density of 40 per cent, the Union Environment Ministry will award Green Credit under the Green Credits Programme (GCP).

The Green Credit will be calculated based on the vegetation status, including the change in the canopy density and the number of surviving trees. Moreover, the credit generated for compensatory afforestation or tree plantation under the programme will be non-tradable and non-transferable except for the transfer between the holding company and its subsidiary companies, the new rules said.

The minimum canopy density of 40 per cent will have to be achieved in the degraded forest land parcel for issuance of Green Credit and one Green Credit shall be awarded for each new tree of the age more than five years. On receipt of the claim report, the Administrator, based on the evaluation and verification of the forest restoration activity through designated agencies, may generate and issue Green Credit to the applicant.

It takes a departure from an earlier methodology which specifies that each tree planted under the scheme would generate one credit, subject to a minimum density of 1,100 trees per hectare within two years of plantation.

The Green Credit generated can be exchanged only once to meet the requirement under the corporate social responsibility and to meet the compliance of the compensatory afforestation in cases related to diversion of forest land for non-forestry purposes.

The GCP was launched in December 2023 at the United Nations Climate Conference. It is an innovative market-based mechanism designed to incentivise voluntary environmental actions across diverse sectors, by various stakeholders like individuals, communities, private sector industries and companies. The green credits issued by the government can then be traded on a domestic market platform to potential buyers looking to meet sustainability targets, or existing legal obligations.

Till now, 57,986 hectares of degraded forest land have been registered under GCP, according to government data.