Greenhouse Gases Emission Intensity Target Rules, 2025
Why focus: Notified under EPA 1986. Iron Law 4 (Act provisions). GS3 Environment, tests carbon market mechanisms and obligated entities.
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Metric Shift: The compliance metric transitioned from energy efficiency goals (measured in Tonnes of Oil Equivalent under the PAT scheme) to direct Greenhouse Gas emission intensity (measured in tCO2e per unit of product).
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Baseline and Targets: Financial Year 2023-24 was established as the strict baseline. 282 industrial plants were given binding reduction targets, ranging from roughly 2.8% for aluminium up to 15% for pulp and paper, to be achieved over FY 2025-26 and 2026-27.
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Issuance of CCCs: The Bureau of Energy Efficiency (BEE) was authorized to issue Carbon Credit Certificates (CCCs) to obligated entities that successfully reduce their emission intensity below their mandated targets.
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Mandatory Surrender: Obligated entities that fail to meet their sector-specific emission intensity targets must now purchase and surrender equivalent CCCs from the Indian Carbon Market to bridge their shortfall.
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Environmental Compensation: In cases of non-compliance, the Central Pollution Control Board (CPCB) is explicitly empowered to levy a monetary penalty equivalent to twice the average market price of a carbon credit certificate.
What Did NOT Change
Despite the June 2025 draft proposal aiming to include them, the heavily polluting Iron and Steel, Fertilizer, and Thermal Power sectors were omitted from the final October 2025 notification. These critical sectors continue to await finalized baselines and remain under older efficiency mechanisms for the time being.
Prelims Angle
NCERT Connection
Common Misconceptions
✗ The new rules impose absolute emission caps, restricting the overall production capacity of Indian industries.
✓ The targets are strictly based on 'emission intensity' (emissions per unit of output). Industries are free to expand total production as long as they adopt cleaner technologies that reduce the amount of carbon emitted per unit produced.
Many international frameworks (like the EU ETS) use absolute 'cap-and-trade' systems, leading people to assume India adopted the exact same restrictive model.
✗ The Ministry of Power is solely responsible for imposing penalties on factories that miss their carbon targets.
✓ While the CCTS framework was heavily shaped by the Ministry of Power and the Bureau of Energy Efficiency, the Environmental Compensation (penalty) for non-compliance is actually levied by the Central Pollution Control Board (CPCB) under the Environment (Protection) Act, 1986.
Because the Carbon Credit Trading Scheme was initially notified under the Energy Conservation Act managed by the Ministry of Power, students often assume all enforcement powers lie with them.
Practice Questions
Q1
How Many CorrectConsider the following statements regarding the Greenhouse Gases Emission Intensity Target Rules, 2025: 1. The baseline year for calculating emission intensity targets is Financial Year 2012-13. 2. The rules introduce absolute emission caps for the Iron and Steel sector. 3. The Central Pollution Control Board (CPCB) can levy Environmental Compensation at twice the average trading price of carbon credits for non-compliance. How many of the above statements are correct?
Q2
Match the FollowingMatch the following institutions with their roles under the Carbon Credit Trading Scheme (CCTS) and the 2025 Rules: List I (Institution) 1. Bureau of Energy Efficiency (BEE) 2. Grid-India 3. Central Pollution Control Board (CPCB) 4. Ministry of Environment, Forest and Climate Change (MoEFCC) List II (Role) A. Imposes Environmental Compensation B. Functions as the Registry for carbon credits C. Issues Carbon Credit Certificates D. Notifies the final sector-specific emission intensity targets Select the correct answer code:
Q3
Assertion & ReasonAssertion (A): The Greenhouse Gases Emission Intensity Target Rules, 2025 do not force industries to cap their total physical output or halt economic expansion. Reason (R): The targets are defined in terms of tonnes of CO2 equivalent per unit of product output, incentivizing cleaner production methods rather than suppressing gross production volumes. Select the correct answer: