Green Credit Rules 2023: Tree Plantation Methodology Explained

Introduction

The Green Credit Rules 2023 aim to promote sustainable forest restoration and environmental accountability. These rules, enacted by the Ministry of Environment, Forest and Climate Change, define how tree plantation activities generate measurable environmental value. In this blog, we will explain the methodology, eligibility, benefits, and usage of Green Credits under the 2023 framework.

Background of Green Credit Rules 2023

First, the Central Government introduced these rules under the Environment (Protection) Act, 1986. Then, in 2023, the Green Credit Rules established a structured system for rewarding environmental actions. Later, in February 2024, the methodology for calculating credits from tree plantation was notified. Finally, in August 2025, the government issued an updated notification with detailed calculation methods.

Eligibility for Claiming Green Credit

Restoration must continue for at least five years on degraded forest land.
Canopy density must reach a minimum of 40%.
Claimants must submit reports in a prescribed format.
Applicants must pay verification fees as determined by the Administrator.

Thus, only after meeting these conditions can applicants claim credits.

Methodology of Calculation

The methodology ensures accuracy and transparency. Credits are calculated on:

Change in canopy density.
Number of surviving trees.
Minimum requirement of 40% canopy density.
One Green Credit for each tree older than five years.

Therefore, growth quality and survival rate, not just numbers, matter most.

Issuance and Verification

Once the Administrator receives a claim report:

Designated agencies evaluate restoration activities.
Verification ensures compliance with standards.
After approval, Green Credits are issued.

So, monitoring and verification remain critical steps in the process.

Transferability of Green Credit

Interestingly, Green Credits are non-tradable and non-transferable, except between a holding company and its subsidiaries. Consequently, this ensures integrity and avoids misuse.

Permissible Exchange of Green Credit

Although non-tradable, Green Credits may be exchanged once for purposes like:

Compensatory afforestation compliance under the Forest (Conservation) Act, 1980.
Fulfilling Corporate Social Responsibility (CSR) obligations.
Meeting tree plantation requirements tied to project approvals.

However, once exchanged, the credits are extinguished and cannot be reused.

Reporting and Governance Value

The Green Credit Rules 2023 also allow credits to be used for environmental, social, and governance (ESG) reporting. This strengthens corporate accountability while aligning with global sustainability standards.

Benefits of the Green Credit Rules 2023

Encourages long-term forest restoration.
Promotes transparency in environmental performance.
Provides measurable value for tree plantation efforts.
Helps companies meet legal and CSR obligations.
Supports India’s climate and biodiversity goals.

Hence, the Green Credit system balances environmental responsibility with corporate accountability.

Conclusion

The Green Credit Rules 2023 bring a structured and transparent approach to tree plantation and forest restoration. By linking environmental actions with measurable credits, the rules encourage organizations and individuals to invest in sustainability. Since the credits can support compliance, CSR, and ESG reporting, they create both ecological and economic value. Moving forward, this framework will help India achieve greener growth.

Download: Green Credit Rules 2023 Tree Plantation Methodology