GS 3 – ENVIRONMENT
Context:
The Ministry of Environment, Forest and Climate Change (MoEFCC) introduced the Draft Greenhouse Gas Emissions Intensity (GEI) Target Rules, 2025.
Greenhouse Gas Emissions Intensity (GEI):
GEI measures the amount of greenhouse gases (GHGs) emitted per unit of product, such as per tonne of cement or aluminium. It is expressed in tonnes of CO₂ equivalent (tCO₂e), accounting for the global warming potential of various gases like CO₂, CH4, N₂O, O₃, water vapour, and synthetic gases including CFCs and HCFCs.
Draft GEI Target Rules, 2025:
The MoEFCC has proposed these rules to establish mandatory emission intensity reduction goals for energy-intensive sectors such as aluminium, cement, pulp and paper, and chlor-alkali.
- Regulatory Timeline: The baseline year is set to 2023-24, with targets applicable for 2025-26 and 2026-27.
- Annual GEI Compliance: Obligated entities must meet annual GEI targets under the Carbon Credit Trading Scheme (CCTS) of 2023.
- Offset Option via Indian Carbon Market: Entities can purchase carbon credit certificates from the Indian Carbon Market to offset any GEI shortfalls.
- Penalty for Non-Compliance: The Central Pollution Control Board will impose an environmental compensation charge equal to twice the average carbon credit price for the compliance year, payable within 90 days.
- Legal Enforcement: Violations will be addressed under the Environmental Protection Act, 1986, providing statutory backing.
- Implementation Oversight: The Bureau of Energy Efficiency will supervise the implementation, and credits will be traded via the Indian Carbon Market, offering both compliance flexibility and profit opportunities.
- Paris Agreement Alignment: The rules align with Article 6 of the Paris Agreement.
Key Objectives of GEI Target Rules:
- To Enable Carbon Market Functioning: The rules operationalise the CCTS, 2023, in line with Article 17 of the Kyoto Protocol, which forms the basis of carbon market principles.
- To Support Climate Goals: These rules contribute to India’s commitment under the Paris Agreement to reduce GDP emission intensity by 45% by 2030 from 2005 levels.
- To Promote Low-Carbon Industry: The rules encourage the decarbonisation of energy-intensive sectors.
- To Drive Technology Adoption: The rules incentivise the use of energy-efficient, sustainable, and climate-resilient technologies in industry.
Complementary Government Initiative:
- PAT Scheme (Perform, Achieve, Trade): Launched in 2012 under the National Action Plan on Climate Change, the PAT Scheme is a market-based approach aimed at improving energy efficiency. While the PAT scheme targets energy usage, the GEI rules focus on emissions intensity. Both initiatives work towards the same decarbonisation goal.
Carbon Credit Trading Scheme, 2023:
This initiative, managed by the Ministry of Power, implements a carbon trading mechanism in India. Under this system:
- The Bureau of Energy Efficiency (BEE) issues carbon credit certificates to entities that exceed their emission reduction targets.
- Emission intensity targets are set by MoEFCC, based on recommendations from the Ministry of Power.
- Entities failing to meet these targets must buy carbon credit certificates.
- The scheme is overseen by a National Steering Committee led by the Power Secretary.
- Integration with GEI Targets: Defines the required targets for industries to generate tradable carbon credits.
Significance for India’s Climate Strategy:
- Supports NDC Implementation: This scheme is a critical instrument for achieving India’s Nationally Determined Contributions under the Paris Agreement.
- Boosts Industrial Accountability: It mandates clear emission reduction targets for different sectors.
- Fosters Green Industrial Transformation: It lays the foundation for sustainable industrial practices and carbon-efficient production.