How Many Carbon Credits Does an Indian Pharma Company Actually Need? A Volume-Sizing Guide
If you run sustainability or procurement at an Indian pharmaceutical company, the question that stalls most offset programmes is not which credits to buy. It is how many. Buy too few and the claim looks hollow; buy too many and finance asks why a seven-figure line item appeared without a defensible basis. This guide works through the sizing arithmetic using emissions figures Indian pharma companies have actually disclosed.
First: pharma is not a CCTS obligated sector
Start here, because it changes the whole calculation. Compliance obligations under India's Carbon Credit Trading Scheme took effect in FY2025-26 for roughly 490 entities across seven energy-intensive sectors. Greenhouse gas emission intensity targets have been notified for nine sectors: aluminium, cement, chlor-alkali and pulp & paper in October 2025, followed by petroleum refining, petrochemicals and textiles in January 2026, per the International Carbon Action Partnership. Pharmaceutical manufacturing is not on that list.
So a pharma company is not sizing a compliance shortfall. It is sizing a voluntary purchase against a target it set itself — an SBTi pathway, a customer contract clause, a tender requirement, or a board-level net-zero commitment. That target, not a regulator, determines the tonnage. If you are still mapping how CCTS works in the background, our CCTS guide covers the mechanism.
Step 1: anchor on a real Scope 1 + 2 number
Disclosed BRSR data gives you a realistic band for a mid-to-large Indian formulations player. Alkem Laboratories reported combined Scope 1 and Scope 2 emissions of 93,205 tCO2e in FY2025-26, down about 15% from 1,09,097 tCO2e the previous year, with renewables at roughly 27% of its energy mix. Cipla reported Scope 1 + 2 intensity of 0.25 tCO2e per lakh of revenue in FY2025-26, down from 0.33. Torrent Pharmaceuticals reported a 32.4% cut in combined Scope 1 and 2 against a FY2019-20 baseline.
Useful rules of thumb that fall out of this:
A single large formulations site typically sits in the 5,000–20,000 tCO2e range for Scope 1 + 2, driven by boiler fuel, HVAC for cleanrooms and purchased grid power.
A mid-size multi-site formulations company lands in the 30,000–100,000 tCO2e range — the band Alkem's disclosure sits inside.
An API or bulk-drug manufacturer runs materially higher per unit of revenue than a formulations-only company, because of solvent recovery, steam load and process heat.
Scope 2 usually dominates unless you operate captive boilers at scale — which means renewable procurement, not credits, is the first lever.
Step 2: subtract what you will abate, then size the residual
Credits should cover residual emissions after abatement, not stand in for it. The sequence that survives audit scrutiny is:
Lock in the Scope 1 + 2 baseline for the most recent completed financial year, verified.
Deduct planned Scope 2 reduction from open-access renewables, rooftop solar and I-RECs over the target horizon. This is usually the single largest cut and is cheaper per tonne than credits.
Deduct Scope 1 reduction from boiler fuel switching, heat recovery and solvent recovery upgrades.
The remainder is your offset volume. For a company at 90,000 tCO2e today targeting a 50% cut by 2030, with 35% deliverable through renewables and efficiency, the residual to offset is roughly 13,500 tCO2e a year at the target date — not 45,000.
Dr. Reddy's Laboratories illustrates how aggressive the abatement half can be: its SBTi-approved near-term target commits to an 80% absolute cut in Scope 1 and 2 by FY2030 from a FY2023 base, with net zero by FY2045. At that level of direct abatement, the credit volume is small — which is the point.
Step 3: decide whether Scope 3 enters the number
Pharma Scope 3 is large and sits mostly in purchased goods and services — KSMs and intermediates, much of it imported. Most Indian pharma companies are not offsetting Scope 3 and should not start. Supplier engagement and insetting are the defensible answers there; see our note on insetting versus offsetting. Credits enter the Scope 3 conversation only for categories you cannot influence, such as business travel and employee commuting, and those are typically under 3% of the footprint.
Step 4: convert tonnes into a budget and a project mix
Once the tonnage is set, price it. Removal credits — afforestation, biochar, soil carbon — cost several times what avoidance credits cost, so the split you choose moves the budget more than the volume does. A common structure for a pharma buyer is a majority of avoidance credits in the near years, with a rising share of removals as the target date approaches. Our removals versus avoidance guide explains the trade-off, and the carbon credit pricing guide covers what drives cost per tonne in the Indian market.
Two practical notes. Contract multi-year rather than spot-buying every March, because prices for high-integrity Indian removals move up as demand builds. And retire credits in the same financial year you claim them, with serial numbers disclosed in the BRSR — unretired credits sitting in a registry account are not an offset.
A worked sizing checklist
Verified Scope 1 + 2 baseline, most recent FY
Target percentage reduction and target year, from your own commitment
Abatement pipeline in tonnes, with dates and capex attached
Residual tonnes = baseline minus abatement at target year
Avoidance / removal split, and price band for each
Retirement and disclosure plan tied to the BRSR cycle
Get those six lines on one page and the number stops being a guess. Csquare helps Indian pharmaceutical companies build the baseline, model the abatement pipeline and source verified credits for the residual — see our carbon credits services and our earlier pharma decarbonisation guide.
Working out how many credits your plants actually need? Talk to the Csquare team for a sizing review built on your own verified emissions data.
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