Recently, the Ministry of Environment, Forest and Climate Change notified the draft GEI Target Rules, 2025.
These rules introduce emissions reduction targets for energy-intensive industries, aligning with the Carbon Credit Trading Scheme (CCTS), 2023.
What is Greenhouse Gas Emissions Intensity (GEI)?
- GEI refers to the amount of greenhouse gases emitted per unit of product output.
- It is measured in tonnes of CO₂ equivalent (tCO₂e) per unit of product.
- This metric helps assess how environmentally efficient an industrial production process is.
Carbon Credits Trading Scheme (CCTS)
- The Carbon Credits Trading Scheme (CCTS), 2023 was launched under the Energy Conservation (Amendment) Act, 2022 to help meet India’s climate commitments under the Paris Agreement.
- It establishes a market-based framework to reduce greenhouse gas (GHG) emissions through carbon credit trading.
Key Provisions
- Implemented by the Bureau of Energy Efficiency under the Ministry of Power.
- Operates via two mechanisms:
- Compliance Mechanism: Mandatory for energy-intensive sectors like power, steel, cement, fertiliser, and petrochemicals.
- Offset Mechanism: Voluntary participation for non-obligated entities to trade credits by reducing emissions.
- Carbon credits represent 1 tonne of CO₂ equivalent reduced or avoided.
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Key Provisions of the Draft GEI Rules
- Baseline and Target Setting: Establishes baseline emission levels for 2023–24 and sets reduction targets for 2025–26 and 2026–27.
- Targets apply to four energy-intensive industries:
- Cement – 186 plants
- Aluminium – 13 plants
- Pulp and Paper – 53 plants
- Chlor-Alkali – 30 plantsMajor corporations under obligation include Vedanta, JSW Cement, Ultratech, Hindalco, JK Cement, etc.
- Compliance: Rules lay down the mechanism for compliance, including monitoring and reporting.Penalties: Industries failing to meet targets may face penalties by the Central Pollution Control Board.
Indian Carbon Market
- The Indian Carbon Market (ICM) is a government-regulated platform for trading carbon credits among industries.
- It is governed under the regulatory framework of the Energy Conservation (Amendment) Act, 2022.
- The market facilitates incentivised decarbonisation by rewarding industries that reduce emissions beyond their set targets.
- It offers flexibility to industries, allowing better-resourced entities to lead in clean transitions.
- The ICM supports a gradual shift for less-resourced industries by enabling them to buy credits to meet targets while continuing to operate efficiently.
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- Carbon Market Mechanism: Carbon credits will be traded via the Indian Carbon Market (ICM) with oversight provided by the Bureau of Energy Efficiency (BEE) under the Ministry of Power.
Significance of the GEI Targets
Climate Commitments
- Helps India move towards its Paris Agreement target, reducing emissions intensity of GDP by 45% by 2030 (compared to 2005 levels).
- Encourages industries to follow a low-carbon growth path through clean energy and process innovation.
Technology Adoption
- Promotes use of sustainable, energy-efficient, and low-emission technologies in high-emission sectors.
- Example: Cement plants can reduce GEI by using biomass instead of coal and upgrading to cleaner kilns.
Linkage with CCTS, 2023
- The CCTS provides a framework for industries to generate, trade, and utilize carbon credits.
- With GEI targets, industries know specific goals they must achieve to earn carbon credits.
- Industries exceeding targets can trade credits, while under-performers must buy credits or face penalties.
Conclusion
- The GEI Target Rules, 2025 are a major step in institutionalising emissions reduction and market-based decarbonisation.
- They reinforce India’s climate objectives while fostering an ecosystem for sustainable industrial transformation.
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