NEW DELHI: All traditionally high-emission industries in India — such as aluminum, cement and pulp & paper — will be required to reduce their greenhouse gas (GHG) emissions to meet specific targets. For the first time, the environment ministry has set GHG emission intensity (GEI) reduction targets for two years, beginning 2025-26, covering 282 obligated entities across the country. These industrial units will be liable to pay a penalty for non-compliance.
The ministry has come out with a draft notification on this under the compliance mechanism of the Carbon Credit Trading Scheme, 2023. It will be finalised after analysing objections or suggestions of stakeholders who are expected to send their comments to the ministry within 60 days.
Industries which will have to reduce GEI within a specified time-period include 13 aluminium plants of Vedanta, Hindalco, Bharat Aluminium, Nalco and others; 186 cement plants of JK Cement, Dalmia Cement, Shree Cement, UltraTech, ACC, Ambuja, JSW Cement and others; 53 pulp & paper plants; and 30 plants that use Chlor-Alkali process to extract certain chemicals. If these industries do not meet their GEI targets by reducing emissions for the respective compliance year, they will have to purchase carbon credit certificates from the Indian carbon market.
In case an obligated entity fails to comply with the GEI target or fails to submit the carbon credit certificates equivalent to the shortfall for compliance, the Central Pollution Control Board (CPCB) will impose ‘environmental compensation’ (penalty) for the shortfall.
The penalty will be equal to twice of the average price at which the carbon credit certificate is traded during the trading cycle of that compliance year. The average price will be determined by the Bureau of Energy Efficiency (BEE), which has finalised detailed procedures to fix GEI targets (in tonnes of carbon dioxide equivalent) for each of the high emission sectors from the 2023-24 baseline year.
“Environmental Compensation shall be paid within the 90 days from the day of such imposition,” said the draft notification.
The targets are in sync with the country’s ‘net zero’ emission goal of 2070 and will contribute to meet its Nationally Determined Contribution (NDCs) — climate action targets — by reducing GEI through the reduction or removal or avoidance of GHG emissions.
It is expected that the move may also make these industries ready to face the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM), which is to be implemented from next year.
The CBAM is a tool to put a price through imposing border tax on carbon intensive goods, like iron & steel, aluminium and cement. India has, however, strongly opposed the EU’s move as it will put a tariff burden on such products of developing countries and impact their trade.
The ministry has come out with a draft notification on this under the compliance mechanism of the Carbon Credit Trading Scheme, 2023. It will be finalised after analysing objections or suggestions of stakeholders who are expected to send their comments to the ministry within 60 days.
Industries which will have to reduce GEI within a specified time-period include 13 aluminium plants of Vedanta, Hindalco, Bharat Aluminium, Nalco and others; 186 cement plants of JK Cement, Dalmia Cement, Shree Cement, UltraTech, ACC, Ambuja, JSW Cement and others; 53 pulp & paper plants; and 30 plants that use Chlor-Alkali process to extract certain chemicals. If these industries do not meet their GEI targets by reducing emissions for the respective compliance year, they will have to purchase carbon credit certificates from the Indian carbon market.
In case an obligated entity fails to comply with the GEI target or fails to submit the carbon credit certificates equivalent to the shortfall for compliance, the Central Pollution Control Board (CPCB) will impose ‘environmental compensation’ (penalty) for the shortfall.
The penalty will be equal to twice of the average price at which the carbon credit certificate is traded during the trading cycle of that compliance year. The average price will be determined by the Bureau of Energy Efficiency (BEE), which has finalised detailed procedures to fix GEI targets (in tonnes of carbon dioxide equivalent) for each of the high emission sectors from the 2023-24 baseline year.
“Environmental Compensation shall be paid within the 90 days from the day of such imposition,” said the draft notification.
The targets are in sync with the country’s ‘net zero’ emission goal of 2070 and will contribute to meet its Nationally Determined Contribution (NDCs) — climate action targets — by reducing GEI through the reduction or removal or avoidance of GHG emissions.
It is expected that the move may also make these industries ready to face the European Union’s proposed Carbon Border Adjustment Mechanism (CBAM), which is to be implemented from next year.
The CBAM is a tool to put a price through imposing border tax on carbon intensive goods, like iron & steel, aluminium and cement. India has, however, strongly opposed the EU’s move as it will put a tariff burden on such products of developing countries and impact their trade.
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