Centre Issues Second Round of Emission Targets for Carbon-Intensive Sectors
The Centre has officially notified the second round of legally binding emission reduction targets for high-emissions industries. This move covers 208 industrial units across key sectors like petroleum refineries, petrochemical units, textile manufacturing, and secondary aluminium production.
Notification Details and Legal Framework
The Ministry of Environment, Forest and Climate Change (MoEFCC) notified the Greenhouse Gases Emission Intensity (GEI) Target (Amendment) Rules on January 13. The ministry made these rules public on January 16. This action finalizes a draft that was published back in June 2025.
These new rules will also bring the covered sectors under India's domestic carbon market. This market operates as part of the Carbon Credits Trading Scheme (CCTS) which launched in 2023.
Understanding Emission Intensity and Targets
Greenhouse Gases Emission Intensity (GEI) refers to the amount of greenhouse gas emitted per unit of product output. Simply put, it measures the gases released while producing a specific quantity of a commodity, such as a tonne of cement or aluminium.
The rules define targets in terms of tonnes of carbon dioxide equivalent (tCo2e) per equivalent output or product. This metric accounts for the impact of all greenhouse gases, not just CO2, based on their global warming potential.
As a baseline, authorities considered emissions intensity for the financial year 2023-24. Compliance targets have now been set for the periods 2025-26 and 2026-27.
Breakdown of Industries Covered
The latest notification sets targets for 208 specific industries. This includes:
- 173 textile units across sub-sectors like spinning, processing, fibre, and composite manufacturing.
- 21 petroleum refineries.
- 11 petrochemical units.
- 3 secondary aluminium units.
Public-sector enterprises like Bharat Petroleum, Hindustan Petroleum, Indian Oil, Numaligarh Refineries, and ONGC are covered. Private-sector giant Reliance Industries Ltd also falls under the petroleum refineries and petrochemical units sector.
Context of the First Round and Sector Focus
The government notified the first set of legally binding emission reduction targets in October. Those initial targets covered four carbon-intensive sectors: aluminium, cement, chlor-alkali, pulp, and paper. That round applied to 282 high-emission industrial units with targets extending through 2026-27.
With this second notification, targets are now finalized for nine key sectors. These sectors are a focus because their emissions are particularly difficult to curb.
Analysis of Impact and Stringency
An analysis by the Council on Energy, Environment and Water (CEEW) published last week examined the first round of targets. It found that the targets for the aluminium, cement, chlor-alkali, pulp, and paper sectors will result in a weighted average reduction ranging from 2.71 percent to 6.5 percent.
The CEEW analysis also noted a delay in notifying the first round of targets. Due to this delay, the government proportionately reduced the targets to account for the elapsed time. This adjustment made the final targets less stringent than originally proposed.
Connection to Carbon Credits Trading Scheme
India launched the Carbon Credits Trading Scheme (CCTS) to create a framework for trading carbon credits. This system incentivizes reductions in carbon dioxide emissions. It supports India's climate action commitments under the 2015 Paris Climate Agreement.
Under this scheme, industries that achieve their legally binding targets earn carbon credits. They can then sell these credits to industries that fail to meet their targets. Conversely, industries that fail to comply with or contravene the GEI target rules will face a penalty. They must pay an environmental compensation equal to twice the average price of carbon credits.
India's Broader Climate Commitments
India has committed to reducing the emissions intensity of its gross domestic product by 45 percent by 2030. This commitment uses 2005 levels as a baseline. It forms part of India's domestic pledges under the Paris Agreement. The emissions intensity of GDP refers to the amount of energy used per unit of economic output.
This latest notification represents a concrete step toward meeting those international climate goals. It places direct responsibility on major industrial players to curb their greenhouse gas outputs.
