India Proposes Legally Binding Emission Targets

On 23rd June 2025, the Ministry of Environment released a draft notification proposing legally enforceable greenhouse gas (GHG) emission intensity targets for over 460 industrial units under India’s first compliance-based carbon market.

Key Points

New Draft Rules: Titled the Greenhouse Gas Emission Intensity Target Rules, 2025, the draft is part of the Carbon Credit Trading Scheme (CCTS), 2023, aimed at reducing emissions across key industrial sectors.
Scope and Sectors Covered: The rules will apply to industries including aluminium, iron and steel, petroleum refining, petrochemicals, and textiles, referred to as “obligated entities.”
Target Years and Baselines: Emission intensity targets will apply for the compliance years 2025–26 and 2026–27, based on 2023–24 baseline data, with benchmarks set by the Bureau of Energy Efficiency (BEE).
Trading and Penalties: Entities must either meet targets or purchase carbon credit certificates from the Indian Carbon Market; failure to comply will trigger penalties under the Environment (Protection) Act, 1986.
Credit Banking and Enforcement: Companies emitting less than targets earn credits, which can be banked for future use; those failing to comply must pay environmental compensation at twice the average credit trading price.