India imposes emission reduction targets on high-emission industries; India’s Ministry of Environment has introduced mandatory greenhouse gas (GHG) emission intensity reduction targets for high-emission industries, including aluminum, cement, pulp and paper, and chlor-alkali sectors. The draft notification, covering 282 entities, mandates compliance starting from the 2025-26 period. Unsuccessful to meet these targets will result in penalties and the obligation to purchase carbon credits under the Carbon Credit Trading Scheme, 2023.
Penalties for Non-Compliance
Industries that do not achieve the specified GHG emission intensity (GEI) reduction targets will be required to buy carbon credit certificates equivalent to the shortfall. If they fail to do so, the Central Pollution Control Board (CPCB) will impose an ‘environmental compensation’ penalty. The penalty amount will be twice the average price of carbon credit certificates during the trading cycle of the compliance year, as determined by the Bureau of Energy Efficiency (BEE).
Alignment with National Climate Goals
These measures are in line with India’s commitment to achieving net-zero emissions by 2070 and its Nationally Determined Contributions (NDCs) under the Paris Agreement. The targets aim to reduce GHG emissions through various strategies, including emission reductions, removals, or avoidance. The implementation of this compliance mechanism is expected to commence in the 2025-26 period, with the final notification to be issued after considering stakeholder feedback.
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Sectoral Impact
The sectors affected by these new regulations include:
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Aluminum: 13 plants, including those operated by Vedanta, Hindalco, Bharat Aluminium, and Nalco.
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Cement: 186 plants, such as JK Cement, Dalmia Cement, Shree Cement, UltraTech, ACC, Ambuja, and JSW Cement.
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Pulp and Paper: 53 plants.
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Chlor-Alkali: 30 plants involved in the extraction of certain chemicals.
These industries will need to implement measures to reduce their GHG emissions to meet the specified targets. The government has also introduced a carbon credit trading scheme to facilitate compliance, allowing companies to trade carbon credits to meet their emission reduction obligations.
Conclusion
India imposes emission reduction targets on high-emission industries, marking a significant step towards achieving its climate goals. The penalties for non-compliance and the introduction of a carbon credit trading scheme are designed to incentivize industries to adopt sustainable practices and reduce their carbon footprint. As the final notification is awaited, stakeholders are encouraged to provide feedback to ensure effective implementation of these measures.
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