In a landmark step toward decarbonising key industrial sectors, the Ministry of Environment, Forest and Climate Change (MoEFCC) has released a draft notification to operationalise India’s first compliance-based carbon market. The move is part of the government’s broader push to lower industrial emissions and meet its international climate commitments.
Market Structure Under Carbon Credit Trading Scheme 2023
The proposed carbon market will function under the Carbon Credit Trading Scheme (CCTS) 2023, which was introduced in June 2023 to create a regulatory system for carbon trading. The scheme is designed to accelerate the adoption of low-carbon technologies by providing a financial incentive for emission reductions.
Emission Intensity Targets for High-Emission Sectors
The draft notification introduces Greenhouse Gas Emission Intensity (GEI) Targets for FY 2025–26 and 2026–27, covering industries such as:
*Aluminium (including smelters and refineries)
*Cement (ordinary Portland and white cement)
*Chlor-alkali, and
*Pulp and Paper (agro-based, integrated, and recycled fibre-based units)
These targets guide year-wise decarbonisation and provide clarity for industry stakeholders as they plan carbon reduction strategies.
Standardised Emission Calculations and Sectoral Benchmarking
To ensure consistency, the draft outlines a uniform formula for calculating and verifying emissions. It also introduces sector-specific benchmarks applicable to both integrated operations and standalone units, aiming to streamline compliance and reporting.
The proposed framework currently covers over 290 industrial entities.
Key Players Across High-Emission Industries
Major companies likely to participate include:
*Vedanta, Hindalco, and NALCO in the aluminium sector
*UltraTech, ACC, Ambuja, Dalmia, and JSW Cement in the cement sector
*Leading pulp and paper manufacturers
Chlor-alkali producers involved in essential industrial chemicals
Industry Welcomes Long-Awaited Policy Move
Industry associations have praised the draft notification as a critical and long-overdue step toward establishing a formal carbon market in India.
“For the first time, India will have a domestic framework that quantifies emissions across sectors that matter,” said Manish Dabkara, President of the Carbon Markets Association of India and Chairman of EKI Energy Services. “The notification not only enables trading of credits but also encourages companies to reduce in-house emissions, allowing for strategic, long-term planning beyond compliance,” he added.
Public Consultation Now Open
As reported by newindianexpress.com, the MoEFCC has opened the draft for public comments over a two-month period, inviting feedback from stakeholders, experts, and industry leaders to help shape the final framework.
