The Indian government has announced greenhouse gas emission intensity (GEI) targets for several carbon-intensive sectors, including petroleum refineries, petrochemicals, textiles, and secondary aluminum. This move brings 208 companies in these sectors under the compliance system of the Indian Carbon Market (ICM), which now covers a total of 490 companies across various polluting industries. The expansion is part of the Carbon Credit Trading Scheme (CCTS), which was introduced in 2023 to reduce greenhouse gas emissions across different sectors of the economy.
The CCTS operates through two routes: a compliance system and an offset system. Under the compliance system, high-emission industries are required to meet assigned emission intensity targets. Companies that exceed their targets can earn carbon credit certificates, which can be sold to companies that fall short of their requirements. The scheme aims to assign a value to emissions through a system of carbon credit trading, providing a financial incentive for companies to reduce their emissions.
The government’s decision to expand the ICM’s compliance framework is the result of years of engagement with industry stakeholders, technical reviews, and coordinated efforts among institutions. The move is expected to play a key role in balancing industrial growth with India’s long-term climate goals and its path toward net-zero emissions. By bringing more sectors under the system and strengthening the compliance process, the Indian Carbon Market is likely to become a crucial tool in reducing the country’s carbon footprint.
The expansion of the ICM’s compliance framework is a significant step towards achieving India’s climate goals. The country has set ambitious targets to reduce its greenhouse gas emissions, and the CCTS is a key component of its strategy to achieve these targets. By providing a financial incentive for companies to reduce their emissions, the scheme is expected to drive innovation and investment in low-carbon technologies, ultimately contributing to a more sustainable and environmentally-friendly economy. Overall, the government’s move to expand the ICM’s compliance framework is a positive step towards a cleaner and more sustainable future for India.