India notifies first emission intensity targets for carbon-intensive sectors

Penalty for greenhouse gases emission

The penalty, termed “environmental compensation”, will be twice the average trading price of carbon credits during that compliance year.

The average price will be determined by the Bureau of Energy Efficiency (BEE). The Central Pollution Control Board (CPCB) will impose and oversee recovery of penalties, which must be paid within 90 days.

The notified schedule details company-wise and plant-wise targets.

For example, aluminium smelters operated by Vedanta, Hindalco, Nalco and Balco and large cement plants owned by UltraTech, Dalmia, JK Cement, Shree Cement and ACC, feature in the first compliance cycle.

Emission intensity reduction targets range from about 3.4% over two years in the cement sector to about 5.8% in aluminium, 7.5% in chlor-alkali and 7.1% in pulp and paper, based on the baseline year.

India’s carbon credit trading framework is seen as critical to meeting its nationally determined contribution (NDC) targets under the Paris Agreement, including reducing the emission intensity of GDP by 45% by 2030 from 2005 levels and achieving net zero by 2070.

The rules also prepare Indian exporters to adapt to international mechanisms such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), which taxes carbon-intensive imports like cement, steel and aluminium.