MoEFCC notifies GHG emission intensity targets for four Indian sectors

**On October 8, 2025, the MoEFCC notified the Greenhouse Gas Emission Intensity Targets Rules, 2025, setting mandatory targets for aluminium, cement, Chlor-Alkali and paper sectors under the Carbon Credit Trading Scheme. Obligated entities including Vedanta and UltraTech Cement face environmental compensation at twice the carbon credit price for shortfalls. **

India's Ministry of Environment, Forest and Climate Change notified the Greenhouse Gas Emission Intensity Targets Rules, 2025 via official gazette on October 8, 2025, establishing mandatory emission intensity targets for obligated entities in the aluminium, cement, Chlor-Alkali and paper sectors. The rules enforce the Carbon Credit Trading Scheme introduced in 2023, with targets calculated from 2023-24 baseline data and specified for compliance years 2025-26 and 2026-27. The notification, which invokes powers under the Environment Protection Act, 1986, incorporated recommendations from the Bureau of Energy Efficiency and the National Steering Committee following a draft published April 16, 2025.

Obligated entities in four sectors are directly affected, including named companies Vedanta Limited and UltraTech Cement, with the aluminium sector targets divided into smelter and refinery sub-sectors. Entities must reduce tCO2e per unit of equivalent output and register on the Indian Carbon Market portal. Those failing to meet targets face environmental compensation equal to twice the average trading price of carbon credits, and non-compliance leads to surrender of carbon credits equivalent to the shortfall, while surplus carbon credit certificates may be banked under the rules.

Obligated aluminium, cement, Chlor-Alkali and paper entities should register on the Indian Carbon Market portal, verify their assigned emission intensity targets for compliance years 2025-26 and 2026-27, and ensure accurate greenhouse gas emissions reporting. Companies should assess gaps against the 2023-24 baseline and plan energy efficiency and low-emission technology investments to avoid environmental compensation set at twice the carbon credit trading price. Entities should follow detailed procedures under the Carbon Credit Trading Scheme and the formulas specified for carbon credit issuance and banking of surplus certificates.

Key figure — Non-compliance penalty: environmental compensation equal to twice the average carbon credit trading price