🌏 Understanding India’s Greenhouse Gas (GHG) Emission Intensity Target Rules 2025
🏛️ Background
On 8 October 2025, the Ministry of Environment, Forest and Climate Change (MoEF&CC) notified the Greenhouse Gas (GHG) Emission Intensity Target Rules, 2025 under the Environment (Protection) Act, 1986.
This notification marks a major step in India’s climate governance, introducing a performance-linked mechanism to reduce greenhouse gas emissions across major industrial sectors such as Aluminium and Cement.
These rules are part of India’s broader strategy to operationalize the Carbon Credit Trading Scheme (CCTS) — an initiative designed to create a national carbon market, promote accountability, and support the country’s Net Zero by 2070 commitment.
🌿 What Are the GHG Emission Intensity Target Rules?
The GHG Emission Intensity Target Rules, 2025, define how specific industries must measure, monitor, and reduce their emissions per unit of production output.
In simpler terms, these rules link every tonne of industrial production to a measurable level of greenhouse gas emission (in tonnes of CO₂ equivalent).
The idea is not just to limit pollution but to make emission reduction a quantified, verifiable, and tradable parameter in India’s emerging carbon market.
⚙️ Key Components of the Rules
1️⃣ Scope and Applicability
Initially, the rules apply to high-emission sectors such as Aluminium and Cement, with more industries expected to join in the coming years.
Each unit or facility receives a specific GHG emission intensity target based on its current (baseline) performance.
2️⃣ Intensity-Based Targets
Targets are expressed as “tonnes of CO₂ equivalent per tonne of product.”
For example, an aluminium smelter producing one tonne of aluminium must reduce its emissions per tonne by a defined percentage compared to its baseline level.
3️⃣ Carbon Credit Certificates (CCC)
If a facility performs better than its assigned target, it earns Carbon Credit Certificates (CCCs) issued by the Bureau of Energy Efficiency (BEE).
These certificates can be traded or banked under India’s Carbon Credit Trading Scheme, creating economic value for emission reductions.
4️⃣ Non-Compliance and Compensation
If a facility fails to meet its target, it must either:
- Purchase equivalent Carbon Credit Certificates from the market, or
- Pay environmental compensation, which is twice the average market value of the certificates.
This ensures that all entities remain accountable for their emission performance.
5️⃣ Data and Transparency
All participating industries are required to register and report their data on India’s National Carbon Market Portal, enabling real-time monitoring and policy evaluation.
🧱 Sectoral Focus: Cement and Aluminium
🏭 Cement Sector
India’s cement industry contributes significantly to total industrial emissions due to its energy-intensive production process.
The new targets will push the sector to adopt energy-efficient kilns, alternative fuels, and clinker substitution technologies.
⚙️ Aluminium Sector
The aluminium industry, particularly smelting operations, has been assigned emission intensity targets that encourage the adoption of renewable electricity, advanced anode materials, and low-carbon electrolysis technologies.
Both sectors are among India’s largest industrial emitters, making them key drivers for the country’s decarbonization journey.
📊 Implementation and Institutional Structure
The Bureau of Energy Efficiency (BEE) serves as the implementing agency under the supervision of the MoEF&CC.
It coordinates with:
- The Central Electricity Regulatory Commission (CERC) for market oversight.
- The National Steering Committee on Carbon Markets for policy integration.
- Designated industrial units for data verification and compliance audits.
The scheme functions similarly to India’s earlier Perform, Achieve, and Trade (PAT) mechanism but expands its focus to include all greenhouse gases rather than just energy efficiency.
🌎 How This Fits into India’s Climate Commitments
India’s climate policy is structured around three key pillars:
- Energy Transition – expanding renewable energy capacity to 500 GW by 2030.
- Emission Intensity Reduction – cutting GDP emission intensity by 45% by 2030 compared to 2005 levels.
- Net Zero Pathway – achieving carbon neutrality by 2070.
The GHG Emission Intensity Target Rules 2025 play a vital role in achieving the second pillar by ensuring that large industries follow a transparent, data-driven approach to emission reduction.
This also improves India’s alignment with the Paris Agreement’s Article 6 on international carbon markets, potentially allowing Indian industries to benefit from global carbon finance mechanisms in the future.
💬 Expert Insight: Why This Matters
From a policy standpoint, the GHG Intensity Rules 2025 are both timely and transformative.
They:
- Shift focus from “pollution control” to performance-based emission reduction.
- Establish a national carbon market architecture.
- Promote economic incentives for low-carbon innovation.
- Provide a consistent data framework for future international reporting under the UNFCCC.
However, successful implementation will depend on:
- Reliable measurement, reporting, and verification (MRV) systems.
- Digital infrastructure for emission data tracking.
- Training and capacity-building across industries.
- Integration of renewable energy and circular economy practices into industrial operations.
🔍 Looking Ahead
The next few years will determine how effectively India can expand this program to other sectors — including steel, fertilizers, power generation, and petrochemicals.
As carbon trading matures, industries that adopt cleaner production early will likely benefit the most, both environmentally and financially.
The GHG Emission Intensity Target Rules, 2025 are not just regulatory — they are strategic.
They combine environmental responsibility with market opportunity, enabling India’s industries to grow sustainably while contributing to global climate goals.
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