The Ministry of Environment Forest and Climate Change (“Ministry”) has invited public comments on draft Greenhouse Gases Emission Intensity Target Rules, 2025 (“Draft Rules”) by 20^th June, 2025.

Objections and suggestions in respect of the Draft Rules may be addressed to the Joint Secretary, Ministry of Environment, Forest and Climate Change, Indira Paryavaran Bhawan, Jor Bagh Road, New Delhi – 110003 or through mail at: ccts.hsm-moefcc@gov.in.

Background: 

The Ministry of Power had notified the Carbon Credit Trading Scheme, 2023 (“Scheme”) under the Energy Conservation Act, 2001, it specifies the Indian carbon market framework where a market framework is established for trading of the carbon credit certificates to reduce or remove or avoid the greenhouse gases emissions. Under the compliance mechanism of the Scheme, the greenhouse gases emission intensity (“GEI”) targets for the obligated entities were to be notified by the Ministry. Hence, the Ministry has invited public comments on GEI targets.

Key Highlights:

1. Introduction of following definitions under the Draft Rules:

1. 1. “Banked” means the number of carbon credit certificates remaining with an obligated entity after the completion of compliance for the respective compliance year.
   2. “Bureau” means the Bureau of Energy Efficiency as defined in section 2(d) of the Energy Conservation Act, 2001 (52 of 2001).
   3. “Compliance year” means the financial year by which an obligated entity shall meet its greenhouse gases emission intensity target.
   4. “Detailed procedure” shall have the same meaning as assigned to it in sub-paragraph (2) of paragraph 12 in the Carbon Credit Trading Scheme, 2023, notified vide S.O. 2825 (E) on 28th June, 2023.
   5. “GEI” means greenhouse gases emission intensity in tCO2e/equivalent output or product.
2. The objectives of these Rules are-
   • Proposal to contribute to the attainment of the Nationally Determined Contribution by reducing GEI through the reduction or removal or avoidance of greenhouse gases emissions.
   • Proposal to promote the adoption of sustainable, cutting-edge technologies across traditionally high emission industries, for addressing climate change.
3. Proposal to introduce obligations for the obligated entities, such as-
   • achieving the GEI targets in the respective compliance year;
   • meeting its GEI target for the respective compliance year by purchasing carbon credits certificates from the Indian carbon market, in case of not achieving the prescribed GEI target;
   • submitting the banked carbon credit certificates or carbon credit certificates purchased in the current compliance year equivalent to the shortfall to comply with the GEI target in the respective compliance year;
   • registering on the Indian Carbon Market (ICM) Portal within the timeline and in the manner as stipulated in the Detailed Procedure as published by Bureau;
   • submitting all the documents within the timeline and in the manner as stipulated in the Detailed Procedure as published by the Bureau. All the submission to be made through the Indian Carbon Market (ICM) Portal;
   • being liable to pay penalty, in case of non-compliance, against the shortfall in the respective compliance year.
4. Proposal to introduce formula for obligated entities to determine number of carbon credit certificates to be purchased by the Obligated Entity to meet the shortfall.
5. Proposal to introduce levying of environmental compensation on such obligated entity for the shortfall in the respective compliance year which will be equal to twice of the average price at which carbon credit certificate is traded. Further, it is proposed that environmental compensation has to be paid within 90 days of imposition.

Source: Ministry of Environment Forest and Climate Change

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