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Hindustan Times
01-07-2025
- Business
- Hindustan Times
Govt notifies draft carbon rules for industries
The union environment ministry has issued a draft notification on greenhouse gases emission intensity (GEI) targets for industries under India's carbon credit trading scheme. These emission targets are for 2025-26 and 2026-27 for a range of industries under the carbon trading market and suggest that the carbon market will become operational during the period. Employees guide finished corrugated steel roofing onto a pallet in the tube mill at the manufacturing facility of Uttam Galva Steels Ltd., in Khopoli, Maharashtra, India, on Friday, June 13, 2014. (Bloomberg) The Union government notified the Carbon Credit Trading Scheme in 2023 under the Energy Conservation Act, 2001 which defined the Indian carbon market framework, established for trading of the carbon credit certificates to reduce or remove or avoid the greenhouse gases emissions. The targets have been issued for three companies in aluminium; 253 in the iron and steel sector; 21 in petroleum refining; 11 in petrochemicals; 11 naphtha ; and 173 spinning/textile units which have registered under the scheme. The draft notification also states that the obligated entity (company) shall achieve the GEI targets in the respective compliance year as per the schedule provided in the draft notification. They can meet their GEI target for the respective compliance year by purchasing carbon credits certificates from the Indian carbon market, in case they do not achieve the prescribed GEI target. The GEI Targets will be calculated by the Bureau of Energy Efficiency (BEE). The draft notification also provides for penalty provisions . In case an obligated entity fails to comply with GEI target or fails to submit the carbon credit certificates equivalent to the shortfall , the Central Pollution Control Board (CPCB) will impose Environmental Compensation for the shortfall in the respective compliance year which will be equal to twice of the average price at which carbon credit certificates are traded during the trading cycle of that compliance year. The average price shall be determined by BEE. BEE in a 2023 report said that India has been at the forefront of climate action to meet the global climate goals through its ambitious Nationally Determined Contributions (NDC). 'To facilitate the achievement of India's enhanced NDC targets, the government has initiated the development of the unified carbon market mechanism 'Indian Carbon Market' (ICM) which will mobilize new mitigation opportunities through demand for emission reduction credits by private and public entities,' it added. A single market at the national level, as opposed to having multiple sectoral market instruments, would reduce transaction costs, improve liquidity, enhance a common understanding and targeted capacity development, and streamline the accounting and verification procedures, it said. 'With the recent announcement of greenhouse gas intensity reduction targets for entities within four more sectors, India is getting closer to the operationalisation of its carbon market. While there is no doubt that this instrument will be effective in achieving the goal of cost effective industrial decarbonisation, the government should now start assessing the impact of potential inclusion of currently excluded power sector within the carbon market's ambit. If solutions to address the impact on power prices, distribution companies' revenues and coal capacity to ensure power affordability, reliability and security can be found, the next immediate step should be to include the power sector which will make India's carbon market even more successful,' said Vaibhav Chaturvedi, Senior Fellow at Council on Energy, Environment and Water.
India Gazette
30-06-2025
- Business
- India Gazette
Govt drafts emission targets for over 460 industries under carbon market plan
By Vishu Adhana New Delhi [India], June 30 (ANI): The Ministry of Environment has issued a draft notification proposing legally binding greenhouse gas (GHG) emission targets for over 460 industrial units as part of India's first compliance-based carbon market. The move, aimed at curbing industrial emissions and accelerating decarbonisation, will apply to sectors such as aluminium, iron and steel, petroleum refining, petrochemicals, and textiles. Titled the Greenhouse Gas Emission Intensity Target Rules, 2025, the draft, dated June 23, forms part of the Carbon Credit Trading Scheme (CCTS), 2023. The scheme requires designated industries--referred to as 'obligated entities'--to reduce their GHG emissions per unit of output over time, or compensate by purchasing carbon credit certificates from the Indian Carbon Market. According to the draft, 'the obligated entity shall achieve the GEI targets in the respective compliance year... or meet its GEI target by purchasing carbon credit certificates from the Indian carbon market.' If implemented, the targets will become legally enforceable 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 will be assigned for two compliance years--2025-26 and 2026-27--based on baseline emission intensity data from 2023-24. The draft includes a list of 264 industrial units along with their baseline emission levels and reduction targets for the compliance years 2025-26 and 2026-27 The Bureau of Energy Efficiency (BEE) will determine these targets using sectoral benchmarks and past performance. Greenhouse gas emission intensity (GEI) is defined as tonnes 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 tonne in 2023-24, must reduce that figure to 1.2563 by 2026-27. In the steel sector, Arcelor Mittal Nippon Steel India's Hazira facility--India's largest obligated entity by production volume--must cut its emission intensity from 2.2701 to 2.1696 tCO2 per tonne during the same period. The rules also cover the petroleum refining sector. 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, one of the largest in the country, must bring down its GEI from 4.5745 to 4.4230 tCO2/MBBLS in the same time frame. Entities that emit less than their targets will receive carbon credit certificates, calculated as the difference between the GEI target and actual GEI, multiplied by the total production volume. Conversely, those exceeding their targets must buy the difference in credits from the Indian Carbon Market. 'The number of carbon credit certificates to be issued... shall be determined as per the following formula: (GEI Target - GEI Achieved) x Unit of equivalent product produced,' the draft states. Unused credits can be banked for future use, allowing companies some flexibility across compliance years. However, if an entity fails to meet its target and does not purchase the required credits, the Central Pollution Control Board (CPCB) will impose an Environmental Compensation This amount will be 'equal to twice the average price at which a carbon credit certificate is traded during the trading cycle,' as per the notification. The penalty must be paid within 90 days. Funds collected will be used to support carbon market operations, upon recommendation of the National Steering Committee and approval of the Centre. The ministry has invited comments, objections, or suggestions from the public and industry stakeholders. Submissions must be made within 60 days of the draft's publication and can be emailed to [email protected]. (ANI)
Time of India
24-04-2025
- Business
- Time of India
India's greenhouse gas emission intensity target sets stage for market-led decarbonisation, say experts
Mumbai: India's Ministry of Environment, Forest and Climate Change recently came out with a draft notification setting greenhouse gas emission intensity (GEI) reduction targets for two years, beginning 2025-26, covering 282 obligated entities in various sectors such as aluminium and cement. According to Dhanpal Jhaveri, CEO, Eversource Capital , the draft notification marks a significant inflection point in India's climate policy landscape. 'By setting intensity-based emission reduction targets across 282 industrial entities, the government is not only raising the bar for accountability but also laying the groundwork for a more resilient, low-carbon economy,' he said. Jhaveri added that this is India's first sector-wide regulatory framework for decarbonisation — and it's both pragmatic and progressive. 'It recognises the need to balance industrial growth with climate commitments, while introducing a clear market mechanism for carbon trading and enforceable penalties for non-compliance. These are precisely the signals long-term capital has been waiting for,' he said. He further added that this would enable sustainable value creation, spur innovation, reallocate capital to efficient players, and drive a new competitiveness rooted in low-carbon advantage. 'We're committed to supporting businesses that are forward-thinking, compliant, and climate-aligned. This is not just about meeting targets — it's about building companies that are future-ready, both financially and environmentally,' Jhaveri added. The notification was issued under the compliance mechanism of the Carbon Credit Trading Scheme , 2023. According to the draft, if these industries do not meet their GEI targets, they will have to purchase carbon credit certificates from the Indian carbon market. In case an entity fails to comply with this, the Central Pollution Control Board will then impose a penalty for the shortfall. According to Atanu Mukherjee, CEO, Dastur Energy, it is a positive and timely step towards accelerated industrial decarbonisation , and an important precursor to the creation of friction-free and functioning carbon markets . He, however, added that an administered penalty-based scheme may not be the most economically or socially expedient approach to foster adoption of carbon pricing mechanisms. 'It may be more effective to use carbon markets for price discovery — identifying where mitigation is most cost-effective — and then apply that price not as a penalty, but as the basis for structured cash or credit incentives,' he said. Mukherjee added that these incentives could be directed toward mandatory, trackable emission reduction investments by emitters, thereby combining the efficiency of markets with the directionality of policy.
New Indian Express
23-04-2025
- Business
- New Indian Express
India's first compliance-based carbon market set to take shape with draft notification
In a significant move towards decarbonising high-emission industries, the Ministry of Environment, Forest and Climate Change (MoEFCC) has issued a draft notification to establish India's first compliance-based domestic carbon market. This market, structured under the Carbon Credit Trading Scheme (CCTS) of 2023, seeks to drive industrial adoption of low-carbon technologies and support the country's broader climate goals. The draft notification outlines Greenhouse Gas Emission Intensity (GEI) Targets for 2025, applying to sectors such as aluminium, cement, chlor-alkali, and pulp and paper. These targets include specific reduction goals for the financial years 2025-26 and 2026-27, aimed at enabling year-wise sectoral decarbonisation. The government had introduced the CCTS in June 2023 to establish a regulatory framework for carbon credit trading and to facilitate emission reductions in line with India's commitments under international climate agreements. A total of over 290 entities operating in traditionally high-emission sectors are covered under the draft. A uniform formula has been proposed to calculate and verify emissions, alongside sectoral benchmarking applicable to both integrated operations and standalone units. The aluminium sector includes companies such as Vedanta, Hindalco, and NALCO, covering sub-sectors like smelters and refineries. In the cement industry, the notification lists UltraTech, ACC, Ambuja, Dalmia, and JSW Cement, producing ordinary Portland and white cement. The pulp and paper industry has also been included, with emphasis on agro-based, integrated, and recycled fibre-based plants. The chlor-alkali industry, which involves the electrolysis of saltwater to produce chlorine and sodium hydroxide for industrial uses, is also addressed under the draft. Industry associations have lauded the move, calling it a long-awaited step toward a formal carbon market in the country. 'For the first time, India will have a domestic framework that quantifies emissions across sectors that matter,' said Manish Dabkara, President of the Carbon Markets Association of India and Chairman at EKI Energy Services. 'The notification not only allows for trading credits but also enables companies to reduce in-house emissions, creating space for strategic planning beyond mere compliance,' he added. The MoEFCC has invited public comments on the draft over a two-month consultation period.
Time of India
22-04-2025
- Business
- Time of India
Emission intensity reduction targets set for carbon-intensive industries, penalties for non-compliance
Representative image NEW DELHI: All traditionally high-emission industries in India — such as aluminum, cement and pulp & paper — will be required to reduce their greenhouse gas (GHG) emissions to meet specific targets. For the first time, the environment ministry has set GHG emission intensity (GEI) reduction targets for two years, beginning 2025-26, covering 282 obligated entities across the country. These industrial units will be liable to pay a penalty for non-compliance. The ministry has come out with a draft notification on this under the compliance mechanism of the Carbon Credit Trading Scheme, 2023. It will be finalised after analysing objections or suggestions of stakeholders who are expected to send their comments to the ministry within 60 days. Industries which will have to reduce GEI within a specified time-period include 13 aluminium plants of Vedanta, Hindalco, Bharat Aluminium, Nalco and others; 186 cement plants of JK Cement, Dalmia Cement, Shree Cement, UltraTech, ACC, Ambuja, JSW Cement and others; 53 pulp & paper plants; and 30 plants that use Chlor-Alkali process to extract certain chemicals. If these industries do not meet their GEI targets by reducing emissions for the respective compliance year, they will have to purchase carbon credit certificates from the Indian carbon market. In case an obligated entity fails to comply with the GEI target or fails to submit the carbon credit certificates equivalent to the shortfall for compliance, the Central Pollution Control Board (CPCB) will impose 'environmental compensation' (penalty) for the shortfall. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Start Here - 2025 Top Trend Local network access control Esseps Learn More Undo The penalty will be equal to twice of the average price at which the carbon credit certificate is traded during the trading cycle of that compliance year. The average price will be determined by the Bureau of Energy Efficiency (BEE), which has finalised detailed procedures to fix GEI targets (in tonnes of carbon dioxide equivalent) for each of the high emission sectors from the 2023-24 baseline year. 'Environmental Compensation shall be paid within the 90 days from the day of such imposition,' said the draft notification. The targets are in sync with the country's 'net zero' emission goal of 2070 and will contribute to meet its Nationally Determined Contribution (NDCs) — climate action targets — by reducing GEI through the reduction or removal or avoidance of GHG emissions. It is expected that the move may also make these industries ready to face the European Union's proposed Carbon Border Adjustment Mechanism (CBAM), which is to be implemented from next year. The CBAM is a tool to put a price through imposing border tax on carbon intensive goods, like iron & steel, aluminium and cement. India has, however, strongly opposed the EU's move as it will put a tariff burden on such products of developing countries and impact their trade.
