Context: The Ministry of Environment, Forest and Climate Change (MoEFCC) notified draft Greenhouse Gases Emissions Intensity (GEI) Target Rules 2025. The rules introduce targets for the reduction of greenhouse gas (GHG) emissions by “obligated entities” in energy-intensive sectors and industries.
Relevance of the Topic: Prelims & Mains: Greenhouse Gases Emissions Intensity (GEI) Target Rules, 2025.
- The draft rules mark a critical development in India’s climate policy and its ongoing commitment to the Paris Agreement.
- They lay the foundation for operationalising the Carbon Credit Trading Scheme (CCTS), 2023, by setting specific emission intensity reduction targets for high-emission industries.
What is Greenhouse Gas Emissions Intensity (GEI)?
- Greenhouse Gas Emissions Intensity refers to the amount of GHG emissions per unit of product output.
- It is measured in tCO₂e (tonnes of carbon dioxide equivalent) per equivalent unit of output, taking into account all major greenhouse gases, such as: Carbon dioxide (CO₂), Methane (CH₄), Nitrous oxide (N₂O), Ozone (O₃), Fluorinated gases like CFCs and HCFCs.
- The aim is to assess and reduce emissions without necessarily lowering total production, thus enabling sustainable economic growth.
Key Features of the Draft GEI Target Rules, 2025:
1. Coverage and Scope:
- GHG intensity reduction targets and benchmarks have been set for the highly energy-intensive aluminium, chlor-alkali, pulp and paper, and cement industries.
- Applicable to over 280 industrial units across four energy-intensive sectors : Aluminium plants, Cement plants, Pulp and Paper plants, Chlor-alkali plants.
- Among the large corporations that have been assigned targets under the rules are: Vedanta, Hindalco, Bharat Aluminium, JSW Cement, Ultratech, Nalco, JK Cement, Dalmia Cement, Shree Cement, Grasim Industries, and JK Paper.
2. Baseline and Targets:
- The Rules set forth baseline emissions for 2023-24 and define gradual reduction targets for the years 2025-26 and 2026-27 as part of the mechanism to make India’s Carbon Credits Trading Scheme, 2023, operational.
- The Rules also lay down the compliance mechanism for industries to comply with these targets, and specify penalties for their failure to do so.
3. Integration with Carbon Credit Trading Scheme (CCTS):
- GEI targets define the emissions reduction goal for each industry. If an industry reduces its emissions intensity below the target, it earns carbon credits. These credits can be traded on the Indian Carbon Market, offering a financial incentive for industries to adopt clean technology.
- Industries that fail to meet their targets must either buy carbon credits to offset the shortfall or face penalties imposed by the Central Pollution Control Board.
- The Bureau of Energy Efficiency (BEE) oversees this trading process under the Ministry of Power. This system is based on international models like the Kyoto Protocol’s carbon market (Article 17) and similar schemes running in Europe and China.
The draft Rules make carbon trading operational by setting the standards that industries must meet to earn, sell, or buy carbon credits, thus turning climate responsibility into an economic opportunity. Targets have been set for the reduction of GHG emissions intensity for the first time.
Why are these rules important?
- Meet India’s climate goals: To push industries towards a low-carbon growth trajectory through reduction, removal or avoidance of GHG emissions. E.g., use of biomass in cement kilns.
- Meet India’s commitment under the Paris Agreement: To reduce the emissions intensity of its gross domestic product (the amount of energy used per unit of GDP) by 45% by 2030 compared to 2005 levels.
The draft GEI Target Rules, 2025, are a significant move towards operationalising India’s carbon market and achieving its climate goals.