The Union Environment Ministry introduced new rules in 2025 for awarding green credits under the Green Credit Programme (GCP). These changes focus on improving the quality and survival of trees planted as part of environmental restoration. The updated methodology emphasises long-term growth and canopy density rather than just the number of trees planted.
Recent Changes in Green Credit Awarding
Green credits for tree plantation will now be awarded only after five years. The plantation must achieve a minimum canopy density of 40 per cent and ensure tree survival. Earlier, credits were given within two years based on a minimum of 1,100 trees per hectare. This shift stresses the health and quality of plantations over mere numbers.
Non-Tradable and Non-Transferable Credits
The credits earned through tree plantation will be non-tradable and non-transferable. The only exception is transfer between a holding company and its subsidiaries. Previously, market-based trading of credits was a key incentive under GCP. However, a one-time exchange of green credit is allowed for fulfilling compensatory afforestation obligations or corporate social responsibility requirements. After such exchange, the credit ceases to exist.
Calculation and Verification of Green Credits
Credits will be calculated based on vegetation status, canopy density, and the number of surviving trees after five years. One green credit is awarded per tree older than five years. Designated agencies will evaluate and verify restoration activities before awarding credits. This ensures accountability and transparency in the process.
Role of Forest Departments and Corporate Reporting
State forest departments allot degraded land parcels for plantation and oversee the planting process. The credits earned can be used by companies to report their environmental, social, and governance (ESG) efforts. This aligns with the Securities and Exchange Board of India’s Business Responsibility and Sustainability framework, helping companies showcase their sustainability initiatives.
Background and Impact of the Green Credit Programme
Launched by Prime Minister Narendra Modi in November 2023 at the United Nations Climate Conference in Dubai, GCP promotes voluntary environmental protection actions like tree planting, water conservation, and waste management. By mid-2025, nearly 58,000 hectares of degraded forest land had been registered under the programme, reflecting growing participation and environmental commitment.
Focus on Sustainability and Quality
The revised methodology addresses past criticisms of government afforestation efforts that focused on quantity rather than survival and canopy quality. By requiring a five-year evaluation period and a 40 per cent canopy density, the programme aims to ensure meaningful environmental restoration and long-term carbon sequestration benefits.
Questions for UPSC:
- Point out the significance of voluntary environmental initiatives like the Green Credit Programme in India’s climate change mitigation strategy.
- Critically analyse the role of state forest departments in managing afforestation projects and ensuring sustainable forest management.
- Estimate the impact of non-tradable green credits on corporate environmental responsibility and market-based conservation efforts.
- What are the challenges in measuring forest canopy density and tree survival? How can technology aid accurate monitoring and reporting?
