India Notifies Draft Carbon Emission Intensity Rules for Industries

New Delhi, Jul 1 (KNN) The Ministry of Environment, Forest and Climate Change has released draft rules—Greenhouse Gases Emissions Intensity (GEI) Target Rules 2025—placing measurable reduction obligations on carbon‑intensive sectors such as aluminium, cement, pulp & paper, and chlor‑alkali.

These rules, open to public feedback for 60 days, set baseline emissions for FY 2023–24 and define specific reduction targets for FY 2025–26 and FY 2026–27.

Covering 282 individual units—including 13 aluminium, 186 cement, 53 pulp & paper, and 30 chlor‑alkali facilities—the rules create a framework for carbon credit issuance and trading under India’s Carbon Credit Trading Scheme (CCTS), launched in 2023. 

Facilities that meet or exceed their intensity targets can generate tradeable carbon credits, while those falling short must purchase credits or face penalties.

Non‑compliance carries financial consequences: such entities must either procure the equivalent carbon credits or pay an environmental compensation—calculated at twice the average carbon‑credit price during the compliance year—within 90 days, as per Central Pollution Control Board oversight.

The aim is twofold: to decarbonise energy‑intensive industries and support India’s Paris Agreement goals.

By incentivising cleaner production methods—such as fuel switching, energy efficiency improvements, and sustainable technologies—the rules help drive India toward its Nationally Determined Contributions (NDCs) and long‑term net‑zero ambitions.

This marks a significant upgrade from the earlier Perform, Achieve and Trade (PAT) mechanism, adding emissions‑intensity reduction into compliance frameworks.

It aligns industrial responsibility with measurable outcomes while strengthening India’s domestic carbon market and readiness for global mechanisms like the EU’s Carbon Border Adjustment Mechanism.

(KNN Bureau)