Draft Greenhouse Gases Emission Intensity (GEI) Target Rules, 2025, Released by MoEFCC

On 16 April 2025, India’s Ministry of Environment, Forest and Climate Change (MoEFCC) published the draft Greenhouse Gases Emission Intensity (GEI) Target Rules, 2025. The regulation outlines mandatory emissions intensity reduction targets across major industrial sectors and establishes compliance mechanisms under the framework of the Carbon Credit Trading Scheme (CCTS), 2023. This marks a significant policy step toward fulfilling India’s climate commitments under the Paris Agreement.

Sectoral Coverage and Applicability

The draft rules apply to 282 industrial units across four high-emission sectors:

• Cement: 186 units
• Pulp & Paper: 53 units
• Chlor-Alkali: 30 units
• Aluminium: 13 units

The targets will be measured against a baseline year of FY 2023–24, with obligations to reduce greenhouse gas emissions per unit of production.

Assigned Reduction Targets and Timeline

Sector-specific emission intensity reduction targets are set as follows:

• Cement: 3.62%
• Chlor-Alkali: 7.13%
• Aluminium: ~5.5%
• Pulp & Paper: 6.42%

Compliance Periods

• Phase I: FY 2025–26
• Phase II: FY 2026–27

All reductions must be verified through independent third-party audits and reported to a centralized digital platform to ensure transparency.

Compliance Mechanism and Carbon Trading

• Entities achieving reductions beyond their targets will earn carbon credits, tradable on the Indian Carbon Market (ICM).
• Non-compliant entities must procure credits or pay financial penalties equivalent to twice the average annual market price of carbon credits.
• This system, modelled as a cap-and-trade scheme, is intended to offer both flexibility and economic incentives for low-carbon innovation.

Governance and Oversight

Implementation will occur under the Industrial Chemicals Environmental Management Standard (IChEMS) and be overseen by the Central Pollution Control Board (CPCB). The goal is to create a harmonized, transparent regulatory ecosystem for industrial emissions control.

Alignment with National Climate Goals

The GEI Target Rules directly support India’s Nationally Determined Contribution (NDC), which commits to reducing GDP emissions intensity by 45% by 2030, compared to 2005 levels. This rule is a cornerstone of India’s low-carbon industrial transformation strategy.

Next Steps for Affected Industries

Covered entities are advised to initiate the following actions:

• Validate baseline GEI data (FY 2023–24)
• Develop robust emissions tracking and reporting systems
• Identify in-house emission reduction opportunities
• Explore options for carbon credit generation or procurement
• Engage in the public consultation and regulatory implementation process

Pathway to Sustainable Industrial Development

India’s draft GEI Target Rules, 2025, establish a regulatory foundation for balancing industrial growth with climate responsibility. The blend of binding targets and market-based flexibility reflects a strategic, forward-looking approach to decarbonizing India's industrial base.

Reference: MoEFCC Draft GEI Rules, 2025 (PDF)