Why in the News?
The Centre has notified the first legally binding Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025 for four high-emission sectors: aluminium, cement, chlor-alkali, and pulp & paper.
This marks a critical step in operationalising the Carbon Credit Trading Scheme (CCTS), 2023.
Back2Basics: Greenhouse Gas Emission Intensity (GEI)
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About Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025:
- Notification: Issued by the MoEFCC on October 8, 2025, these are India’s first legally binding emission intensity targets for industries.
- Objective: To limit greenhouse gas emissions per unit of product output in high-emission sectors, thereby promoting low-carbon industrial growth and aligning with India’s Paris Agreement commitment to reduce emission intensity of GDP by 45% by 2030 (from 2005 levels).
- Coverage: Applies to 282 industrial units across four sectors– cement (186 units), aluminium (13), chlor-alkali (30), and pulp & paper (53).
- Compliance Period: 2025–26 and 2026–27; emission limits expressed in tCO₂e (tonnes of CO₂ equivalent) per unit of product.
- Mechanism:
- Units achieving targets earn carbon credits (certified by the Bureau of Energy Efficiency).
- Non-compliant units must buy credits or face environmental compensation under CPCB oversight.
- Purpose: To operationalise India’s domestic carbon market, encourage technology upgrades, and institutionalise market-based climate compliance.
- Outcome: Marks transition from voluntary energy-efficiency drives (PAT Scheme) to a legally enforceable carbon-intensity regime, integrating emission monitoring, trading, and compliance.
What is the Carbon Credit Trading Scheme (CCTS), 2023?
- Launched by: Ministry of Power in 2023 to establish a domestic carbon trading market under India’s Energy Conservation Act framework.
- Objective: To create a structured mechanism for generating, certifying, and trading carbon credits earned through verified emission reductions.
- Administered by: Bureau of Energy Efficiency (BEE), which issues Carbon Credit Certificates (CCC) to compliant industries.
- Framework:
- Industries meeting or exceeding GEI targets receive tradable credits.
- Entities failing to meet targets must purchase credits to offset excess emissions.
- Credits are traded on the Indian Carbon Market (ICM) platform.
- Purpose: To make emission reduction economically incentivised, transforming carbon from a cost burden into a market asset.
- Global Parallel: Similar to the EU Emissions Trading System (2005) and China’s National Carbon Market (2021).
- Significance: Integrates energy efficiency, emission control, and fiscal instruments to drive India’s net-zero transition through a market-based, transparent, and measurable approach.
| [UPSC 2025] Consider the following statements:
I. Carbon dioxide (CO₂) emissions in India are less than 0.5 t CO₂/capita. II. In terms of CO₂ emissions from fuel combustion, India ranks second in Asia-Pacific region. III. Electricity and heat producers are the largest sources of CO₂ emissions in India. Which of the statements given above is/are correct? Options: (a) I and III only (b) II only (c) II and III only * (d) I, II and III |
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