October 2026 Climate Brief: CCTS Compliance, CBAM Costs and COP31 Countdown

October 2026 opens with India's carbon market in its first real compliance cycle, the EU's CBAM in its second year as a live cost, and COP31 five weeks away. Here is what Indian carbon-credit buyers, obligated entities and exporters should track this month.

1. CCTS: from notification to first compliance

India's Carbon Credit Trading Scheme now binds seven sectors: aluminium, cement, chlor-alkali, pulp and paper (notified October 2025), plus petroleum refining, petrochemicals and textiles (notified January 2026). As reported by ICAP, roughly 490 entities carry greenhouse gas emission intensity targets for 2025-26 and 2026-27, measured against an FY2023-24 baseline. Iron and steel and fertiliser targets were still awaited at the last update we could verify, so check the Bureau of Energy Efficiency notifications before assuming your sector's status.

The practical shift: entities beating their targets earn tradeable Carbon Credit Certificates, and those missing them must buy and surrender equivalents. The Indian Carbon Market Portal, which went live on 21 March 2026, is the registration, verification and issuance backbone. For sector-level numbers, see our guides to cement, textile mills and petroleum refineries.

The question for obligated entities has moved from "what is my target?" to "what does a shortfall cost me, and when do I buy?"

2. How trading will actually work

Once CCCs start trading, they will move through power exchanges under CERC oversight. Our explainer on the CERC 2026 rulebook covers registration, trading windows and settlement. Three things worth doing now:

• Confirm your entity registration and monitoring plan are complete on the portal.

• Model your FY2026-27 position under at least two CCC price scenarios, not one.

• Decide who in the organisation is authorised to transact before the market opens.

3. EU CBAM: now a running cost, not a reporting exercise

The definitive phase began on 1 January 2026, and the EU has since adopted simplification measures aimed at smaller importers. For Indian exporters of steel, aluminium, cement and fertiliser, the exposure is the gap between the embedded-emissions cost in the EU and any carbon price already paid at home. Recognition of domestic carbon pricing is the lever to watch; our piece on UK CBAM recognising India's CCTS shows how that argument is playing out in a neighbouring regime. Exporters should check the latest Commission guidance directly for current certificate timelines.

4. Voluntary market: quality signals strengthen

Two developments matter for buyers. First, Verra launched a new integrated registry with S&P Global Energy in late August, consolidating VCS, its plastic waste programme and SD VISta in one system. Second, discussion at the Brazilian Climate and Carbon Conference on 28 August cited roughly 113 million issued credits reflecting the ICVCM's Core Carbon Principles across 44 approved methodologies, with CCP-labelled credits commanding premiums of around 10-18%, and as much as 40% for cookstove projects.

For Indian buyers, the message is consistent: labelled, verifiable credits cost more but carry less reputational risk. Our guide to how carbon credit verification works explains what to check before you buy.

5. COP31: what to watch from 9 November

COP31 runs 9-20 November in Türkiye, with Türkiye's Murat Kurum as President-Designate and Australia's Chris Bowen leading negotiations. The presidency's June action agenda set three 2035 targets: raise electricity's share of final energy demand from about 20% to 35%, halve the growth rate of global waste, and cut building energy intensity by at least 25%. Expect the talks to focus on implementation rather than new pledges, with Article 6 carbon market rules and climate finance as the likely flashpoints for India.

Where Csquare fits

Csquare helps Indian companies turn these headlines into decisions: CCTS shortfall modelling, high-integrity credit sourcing, CBAM exposure mapping and BRSR-aligned reporting. If you want to know what October's developments mean for your plants and portfolio, get in touch with our team.