India Launches Carbon Credit Scheme to Cut Industrial Emissions

ENA Sectors 2025-07-15 16:58:33 New Delhi, Jul 15 (KNN) The Indian government has recently introduced greenhouse gas (GHG) emissions intensity targets for eight energyâintensive industrial sectors—including steel, cement, aluminium, textiles, petrochemicals, oil refineries, paper & pulp, and chlorâalkali—under its Carbon Credit Trading Scheme (CCTS). Launching in 2023 via the Energy Conservation (Amendment) Act, it aims to curb emissions and reward entities that outperform benchmarks by issuing tradable carbon credit certificates, while allowing laggards to buy credits or face penalties. The scheme is modeled loosely on the PAT (Perform, Achieve, Trade) mechanism, which successfully cut energy intensity across covered sectors by enabling high performers to sell efficiency certificates and others to comply via purchases. However, assessments of the earlier PAT cycles revealed mixed results at the plant level, despite achieving aggregate reductions in energy intensity. The heart of the critique: CCTS's current targets aim for only a ~1.68% annual decline in emissions intensity from 2023 24 to 2026 27—less ambitious than the projected industry-wide decline of ~2.53% and significantly less than the power sectors 3.44% annual reduction needed for alignment with India's netâzero ambitions. This disparity suggests that while wellâintentioned, CCTS targets may not be stringent enough to meet both Indias 2030 NDCs (45% reduction in emissions intensity vs. 2005) and its 2070 netâzero roadmap. Moreover, CCTS presently excludes key sectors like power, transport, agriculture, MSMEs, and thermal plants—limiting its economy-wide impact. Critics argue for a shift away from merely sector/entityâlevel compliance toward an economyâwide evaluation to truly measure environmental ambition and success. Looking ahead, experts recommend tightening targets progressively, expanding sectoral coverage, integrating international best practices for robust monitoring, and linking CCTS trajectories directly to NDC and netâzero modeling. Only then can it evolve into a meaningful tool for Indias decarbonization journey. (KNN Bureau) 42820 https://knnindia.co.in/news/newsdetails/sectors/india-launches-carbon-credit-scheme-to-cut-industrial-emissions 2025-07-15 16:58:33 knnindia.co.in India Launches Carbon Credit Scheme to Cut Industrial Emissions