Brief Context
In 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 and paper. About These rules fix sector-specific targets for cutting greenhouse gas (GHG) emissions per unit of product, operationalising India’s domestic carbon market under the Carbon Credit Trading Scheme (CCTS), 2023. This move supports India’s Paris Agreement commitment to reduce emissions intensity of
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Syllabus: GS3/Environment, Conservation, Climate Change, Energy
In 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 and paper.
- These Rules form a key part of the Carbon Credit Trading Scheme (CCTS), 2023, which operationalises India’s domestic carbon market.
About
- These rules fix sector-specific targets for cutting greenhouse gas (GHG) emissions per unit of product, operationalising India’s domestic carbon market under the Carbon Credit Trading Scheme (CCTS), 2023.
- This move supports India’s Paris Agreement commitment to reduce emissions intensity of GDP by 45% by 2030 compared to 2005 levels.
Key Features of GEI Target Rules, 2025
- Applicability to 282 industrial units across aluminium, cement, chlor-alkali, and pulp & paper sectors.
- Targets for emissions intensity (tCO₂e per unit output) for years 2025–26 and 2026–27.
- Carbon credits issued for meeting/exceeding targets, tradable within the domestic carbon market.
- Penalties and environmental compensation enforced by the Central Pollution Control Board for non-compliance.
Linkage with Carbon Credit Trading Scheme (CCTS), 2023
- CCTS framework enables issuance, verification, and trading of carbon credits earned from emissions reduction.
- Shift from earlier PAT scheme which lacked a market mechanism to incentivize emission trading.
- Market-based approach to incentivize industrial decarbonisation and cost-effective compliance.
Potential Benefits for India
- Drives industrial sectors towards greater energy efficiency and lower carbon footprint.
- Supports India’s commitment to reduce emissions intensity of GDP by 45% by 2030 compared to 2005 baselines.
- Facilitates technology transfer and promotes innovation in low-carbon technologies.
- Generates economic value through carbon credit trading opportunities.
- Strengthens environmental governance through mandatory compliance and penalties.
Challenges Ahead
- Ensuring robust Measurement, Reporting, and Verification (MRV) systems to maintain credit integrity.
- Managing price volatility and market speculation in carbon credits.
- Equipping industries, especially smaller units, to bear transition costs and technological adaptation.
- Need for capacity building and institutional framing to govern the carbon market effectively.
Comparison with International Carbon Markets
| Aspect | GEI Rules & CCTS, India | EU Emissions Trading System (EU ETS) | China’s National ETS |
| Market Start | 2025 (legally binding pilot in select sectors) | 2005 (world’s first major ETS) | 2021 (national launch, phased sector inclusion) |
| Sectors Covered | Aluminium, cement, chlor-alkali, pulp & paper | Power, industrial sectors, aviation | Power plants initially, planning to expand sectors |
| Compliance Mechanism | Emission intensity targets per product unit; tradable carbon credits | Cap-and-trade with fixed emission caps per year | Cap-and-trade focused on absolute emissions |
| Regulatory Authority | Bureau of Energy Efficiency, CPCB | European Commission, national regulators | China’s Ministry of Ecology and Environment |
| Carbon Credit Trading | Domestic market trading credits | Robust EU-wide carbon market with price signals | Emerging market, evolving in sophistication |
| Integration | Currently domestic market only | Linked with global carbon markets; evolving | Focused on domestic market but exploring expansion |
Way Forward
- Phased Expansion: Gradually include more sectors beyond the initial four.
- Capacity Building: Support industries with knowledge and financial mechanisms to meet targets.
- Strong MRV System: Deploy digital monitoring, sensors, and blockchain for credit authenticity.
Source: IE