The Ministry of Environment has issued a draft notification proposing legally binding greenhouse gas (GHG) emission goals for over 460 industrial units as a part of India’s first compliance-primarily based carbon market.
The move, focused toward curtailing commercial emissions and expanding decarbonization, will apply to sectors which includes aluminium, iron and steel, petroleum refining, petrochemicals, and textiles. Titled the ‘Greenhouse Gas Emission Intensity Target Rules, 2025’, the draft, dated June 23, forms a part of the Carbon Credit Trading Scheme (CCTS), 2023. The scheme needs selected industries – called “obligated entities” – to lessen their GHG emissions per unit of output over time, or compensate by means of buying carbon credit certificates from the Indian Carbon Market.
According to the draft, “the obligated entity shall attain the GEI (gas emission intensity) focus in the respective compliance year… Or meet its GEI target by buying carbon credit certificates from the Indian carbon market.” If carried out, the objectives becomes legally enforce able from the date of final notification. As per the draft, failure to comply will attract financial penalties and legal consequences under the Environment (Protection) Act, 1986.
The targets could be assigned for 2 compliance years – 2025-26 and 2026-27 – primarily based on baseline emission intensity data from 2023-24. The draft consists of a list of 264 industrial units together with their baseline emission stages and decrease targets for the compliance years 2025-26 and 2026-27. The Bureau of Energy Efficiency (BEE) will determine those targets by use sectoral benchmarks and past performance.
Greenhouse GEI is defined as tons of CO2 equivalent emitted per unit of output or product.
For example, Hindalco Industries’ Taloja aluminium plant in Maharashtra, which had a baseline GEI of 1.3386 tCO2 per ton in 2023-24, ought to decrease that figure to 1.2563 by 2026-27. BPCL’s Bina Refinery in Madhya Pradesh, with a crude throughput of over 51-million barrels, has been assigned a GEI reduction trajectory from 5.2312 tCO2 /MBBLS in 2023-24 to 4.8553 by 2026-27. BPCL’s Kochi Refinery need to carry down its GEI from 4.5745 to 4.4230 tCO2 /MBBLS in the same time frame.
Entities that emit less than their objectives will receive carbon credit certificates, calculated because the difference between the GEI target and actual GEI, elevated by means of the total manufacturing volume. Conversely, those exceeding their targets should buy the difference in credits from the Indian Carbon Market.
Unused credit can be banked for future use, permitting enterprises some flexibility throughout compliance years. However, if an entity fails to meet its target and does not purchase the desired credit, the Central Pollution Control Board (CPCB) will impose an Environmental Compensation. This amount may be “equal to twice the average rate at which a carbon credit certificate is traded all through the trading cycle,” as in keeping with the notification. The penalty must be paid within 90 days. Funds accumulated may be used to support carbon market operations, upon recommendation of the National Steering Committee and approval of the Centre.
