In a major move toward industrial decarbonization, India's Ministry of Environment, Forest and Climate Change (MoEFCC) has released a draft consultation paper proposing greenhouse gas (GHG) emission intensity targets for energy-intensive sectors, including the iron and steel industry.
The proposed regulations are part of India’s commitment under the Carbon Credit Trading Scheme (CCTS) 2023, which aims to establish a domestic carbon market. Under the new framework:
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Companies that exceed their GHG intensity targets will be required to purchase carbon credits on the national exchange to offset the surplus emissions.
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Companies that perform better than their targets can trade their surplus quotas, creating economic incentives for emission reduction.
Non-compliance will attract penalties, according to the draft rules.
The Bureau of Energy Efficiency (BEE) will be the nodal agency for calculating sector-specific GHG intensity targets, using a detailed methodology tailored for each industrial segment, including ferrous metals.
In a related development, India had earlier announced criteria for classifying “green steel”. According to that framework, steel with carbon emissions below 2.2 metric tons of CO₂ per metric ton of rolled steel qualifies as green. This threshold is set to be reviewed every three years to reflect technological and environmental advancements.
These proposals mark a significant shift toward regulating and reducing emissions in heavy industry and signal India's intent to align with global climate commitments while building a robust carbon trading ecosystem at home.
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