In a pivotal move to advance its climate commitments, the Ministry of Environment, Forest and Climate Change (MoEFCC) has proposed new rules setting greenhouse gas (GHG) emission intensity targets for major industrial sectors across India. The draft notification, published on April 16, 2025, outlines a structured compliance framework under the Carbon Credit Trading Scheme (CCTS), aimed at accelerating India’s transition toward a low-carbon economy.
The proposed rules, titled the Greenhouse Gases Emission Intensity Target Rules, 2025, establish legally binding sector-specific emission intensity benchmarks, measured in tonnes of carbon dioxide equivalent per unit of product (tCO₂e/t). These benchmarks will apply to key high-emission industries including aluminium, cement, chlor-alkali, and pulp & paper, with compliance expected in two phases covering the years 2025–26 and 2026–27.
Under the new framework, each obligated entity must achieve its specified emission intensity targets or compensate for shortfalls by purchasing carbon credit certificates from the Indian Carbon Market. Failure to meet targets will attract an environmental compensation equivalent to twice the average trading price of carbon credits in that financial year. The revenue collected from such penalties will be utilized for strengthening carbon market infrastructure and supporting decarbonization efforts.
The rules also call for improved transparency and enforcement. Obligated industries will be required to register with the Indian Carbon Market (ICM) Portal and submit periodic compliance reports using protocols developed by the Bureau of Energy Efficiency. A detailed list of 186 obligated facilities, including major players such as Vedanta, Ultratech, ACC, Emami Paper, and Tata Chemicals, has been included in the draft, along with their baseline emission data and assigned reduction trajectories.
This initiative builds on India’s climate goals under the Paris Agreement, especially its Nationally Determined Contributions (NDCs), by shifting toward a market-driven compliance ecosystem. The introduction of emission targets linked to carbon credit trading seeks to embed cost-effective decarbonization across industrial value chains while incentivizing early action.
The Ministry has invited public comments on the draft rules for a period of 60 days from publication. Stakeholders may send their inputs via email to [email protected].
By formalizing performance-linked emission standards and embedding them within a national trading platform, the government is sending a clear signal: India’s carbon market is no longer theoretical—it is now poised to become an instrument of enforceable climate accountability.
