Why in the News?

  • India notified its first legally binding greenhouse gas (GHG) emission intensity reduction targets for key industrial sectors.

Greenhouse Gases Emission Intensity Target Rules, 2025

  • What is it?: The Rules formulated are a measure to operationalise provisions of the Energy Conservation (Amendment) Act, 2022, and aim to support India’s climate commitments under the Paris Agreement.
  • Greenhouse Gas Emission Intensity:
    • Emission Intensity means the amount of GHGs emitted per unit of output (e.g., per tonne of cement or aluminium).
    • Measured in tCO₂e (tonnes of CO₂ equivalent), considering CO₂, CH₄, N₂O, HFCs, etc.
  • Key Features of GEI Target Rules, 2025:
    • Sectors Covered: Applies to four energy-intensive sectors: Cement, Aluminium, Pulp and Paper and Chlor-alkali.
    • Baseline and Targets:
      • Baseline fixed using each entity’s 2023–24 production & emission intensity.
      • Reduction targets set for FY 2025–26 and 2026–27 (two years).
    • Compliance Mechanism:
      • Targets are legally binding. Industries must meet annual assigned GEI targets.
      • Above target: Earns tradable carbon credits (financial incentive).
      • Below target: Must purchase carbon credits OR pay penalties.
      • Penalty: “Environmental compensation” at twice the average carbon credit trading price for that year.
      • Monitoring: Bureau of Energy Efficiency (BEE) sets and tracks targets. The Central Pollution Control Board (CPCB) enforces penalties.
    • Carbon Credit Trading Scheme (CCTS): GEI Rules integrate with India’s domestic carbon market.
  • Significance:
    • Support Paris Agreement NDCs: Target to reduce emissions intensity of GDP by 45% by 2030 (from 2005 levels).
    • Drives low-carbon technology adoption in high-emission industries.
    • Creates a market-driven approach: compliance, trade, and penalty.