MoEFCC proposes GEI targets for carbon market compliance

The Ministry of Environment, Forest and Climate Change (MoEFCC) has released a draft notification on 23 June 2025, setting greenhouse gas emission intensity (GEI) targets for 118 industrial units. These targets are part of the compliance mechanism under the Carbon Credit Trading Scheme, 2023.

The notification outlines how obligated entities—mainly from the aluminium and steel sectors—will need to reduce their emissions intensity over time. GEI is measured in tonnes of CO₂ equivalent per unit of output.

The targets will be enforced annually and calculated based on methods published by the Bureau of Energy Efficiency (BEE). If an entity does not meet its target, it will need to buy carbon credit certificates from the Indian Carbon Market. Conversely, those exceeding their targets will receive certificates, which can be banked or traded.

Failure to comply will result in a financial penalty. The Central Pollution Control Board (CPCB) will impose environmental compensation at double the average trading price of carbon credits for that year. This fund will be maintained separately and used for market operations.

The scheme’s objectives are aligned with India’s Nationally Determined Contributions. It encourages cleaner technology and aims to reduce the emissions intensity of high-emitting industries.

Objections and suggestions to the draft may be sent within 60 days of publication.