In an ideal world, individuals and businesses would embrace sustainable choices like electric vehicles (EVs) simply because it’s the right thing to do for the planet. In the real world however, decisions are shaped by economics—by the need to reduce the cost of change and maximise its benefits.
Early adopters of EVs often face higher upfront costs and uncertainty about long-term savings, despite the clear environmental gains. To bridge this gap, India needs to urgently build a digital, integrated carbon market—one that allows EV users and other green adopters to monetise the carbon savings they generate. By turning emissions reductions into tangible financial value, we can create a powerful incentive that accelerates the transition to cleaner technologies while rewarding those leading the way.
What if saving the planet could also pay your EMI?
Every electric kilometre driven in this country is silently saving carbon, yet none of that invisible value is being cashed in by the ecosystem resulting in higher than required switching costs which in turn are negatively impacting the rate of EV adoption in India.
Additionally, the average Indian carbon credit trades at just $2.35 per tonne of CO₂, far below Bangladesh ($4.45), Sri Lanka ($3.77), and dramatically lower than Pakistan ($28.11).
This proves that there is clearly a structural gap in how India quantifies and captures decentralised emissions savings, particularly from the transport sector. Industrial emitters are progressively being brought into a compliance-driven framework under the Carbon Credit Trading Scheme (CCTS). Meanwhile, India’s transport sector, that generates 15% of national emissions, remains excluded from the scheme and makes a marginal contribution to India’s credit volumes.
Once we integrate the carbon market with the EV ecosystem, India can fundamentally turn carbon into currency. India will decarbonise the air, monetise that decarbonisation, and democratise the benefits. This exercise will convert fleet drivers into climate financiers and a policy challenge into a scalable economic opportunity.
The stakeholders who can make this happen, and the urgent opportunities before them, are clear.
To Government Regulators: Integrate EVs Into the Compliance Mechanism
While India’s carbon market chases billion-dollar valuations, its most committed foot soldiers, small EV fleet operators, remain locked out.
EV transport emissions savings face a cumbersome double bind: systematic exclusion from CCTS compliance mechanisms and technological apartheid that forces drivers into handwritten documentation while industrial polluters access automated carbon monetisation systems.
Eight new methodologies have been approved under CCTS, yet none are tailored for micro-fleet telematics integration. MSME operators navigate multiple agencies for certification while large entities benefit from single-window systems. There is no gateway for grassroots contributors. The irony is that the same EVs helping India reach its emissions intensity reduction target do not stand as beneficiaries to monetising carbon, simply because they do not emit in million-tonne increments.
India has issued 278 million carbon credits from 2010 to 2022, proving the market works. Yet EV data remains untapped. Telematics could turn every clean kilometre into cash, giving fleet operators and gig workers a new income stream. With verified data, drivers become climate earners, not just clean commuters.
A strong compliance framework will not only enable micro fleets in India to monetise their carbon credit with reduced friction – it will also address the critical problem of quality and credibility of credits enabling increased realisations for every unit sold.
The solution is clear and long overdue: democratise measurement and verification by mandating Bureau of Energy Efficiency (BEE) to accept odometer and battery logs from micro-fleets as valid proof. Introduce a “Chota Credit” track with API-based micro-certification for sub-100 tonne reductions to reduce transaction costs and ease access. Build tech infrastructure that auto-converts EV kilometres into tradeable credits. While the BEE accepts advanced monitoring from large emitters, it overlooks telematics from EV drivers. That’s a systemic gap that needs to be addressed since it is a foundational issue.
To Financial Institutions & NBFCs: Treat Carbon Credits as Collateral
India’s carbon credits market is on track to hit $49.4 billion by 2030, yet banks and NBFCs still treat Carbon Credit Certificates (CCCs) as non-financial, especially for unbanked or thin-file borrowers.
Given the predictable nature of EV usage and the monetizable value of credits, verified CCCs can serve as a collateral enhancer or a performance-based payback mechanism. This could de-risk EV loans and expand green financing access. For gig workers, small fleets and other MSMEs , these credits could offset EMIs or serve as repayment buffers. Ignoring this tool severely limits our ability to achieve critical goals – India’s 45% emissions intensity reduction by 2030 and net-zero 2070 goals.
By treating verifiable EV carbon credits as collateral, lenders could reduce risk premiums for gig economy workers and MSME fleets. This would directly support India’s emissions reduction target. The missing piece isn’t technology or market demand, but financial innovation to bridge carbon markets with mobility finance.
This approach would create multiple wins: lenders gain new risk-mitigation tools, borrowers access cheaper capital, and India accelerates both its EV penetration and carbon market growth.
Until we stop treating distributed clean mobility as carbon’s “unorganised sector,” India will keep leaving money on the road, both for drivers who deserve compensation and a market that’s starving for high-integrity credits. When every clean kilometre becomes a carbon asset, we won’t just finance EV adoption, we’ll build a self-sustaining, climate-smart economy from the ground up. For that, the tech exists, the credits are real, the way forward is through policy.
(Kunal Mundra is Founder and CEO of Astranova Mobility. Views expressed are the author’s personal.)