New Delhi, April 23 -- India's Carbon Credit Trading Scheme (CCTS) is expected to become much stricter by FY2027, increasing compliance costs--especially for cement and aluminum companies--according to an ICRA ESG analysis.

The study looked at 14 major companies (10 cement and 4 aluminum) and found that while FY2026 will be a relatively manageable transition year, FY2027 will bring tighter rules and higher financial risks if companies don't reduce emissions fast enough.

In FY2026, cement companies can mostly meet targets if they reduce emission intensity by about 1.5%. But if emissions stay the same or increase, companies could face shortfalls, forcing them to buy carbon credits. Some firms may still benefit by cutting emissions early a...