India’s first ever legally binding emission intensity targets: Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025

Marking a revolutionary move, the Ministry of Environment, Forest and Climate Change (MoEFCC) has released the Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025. These rules are a part of the Carbon Credit Trading Scheme (CCTS), 2023 and put over 282 industrial units under legally enforceable climate targets for the first time in India. GEI rules span over four highly emitting sectors: aluminium, cement, pulp & paper, and chlor-alkali. Why this matters? • India operationalizes its 45% emissions intensity reduction target aligned with the Paris Agreement • Boardrooms must now integrate carbon metrics into compliance & capex decisions • Cost or compliance – by taking proactive emissions reductions measures, companies can turn cost into competitive advantage The targets: • industrial units must reduce the amount of GHG emissions per unit of output (measured in tonnes of carbon dioxide equivalent (tCO2e) per tonne of product) compared to a baseline year 2023‑24 • compliance period begins in 2025-26 and continues through 2026-27 • reduction targets per sector:  cement (186 industrial units) ~ 3.4%  aluminium (53) ~ 5.8%  pulp & paper (13) ~ 7.1%  chlor-alkali (30) ~ 7.5% Compliance Overperformers earn Carbon Credit Certificates (CCCs) tradable in the national carbon market Underperformers must buy credits or pay an environmental penalty amounting to 2x the average credit price Objectives • The GEI targets are in sync with the 2070 net zero goals • Contribution to the Nationally Determined Contribution (NDCs) climate action targets through reduction or removal or avoidance of emissions • Compliance mechanism aimed at incentivizing decarbonization by pricing emissions, with Bureau of Energy Efficiency (BEE) issuing the CCCs for trading through national power exchanges This revolutionary shift from voluntary disclosures to enforceable decarbonisation aligns climate change in India with compliance, strengthening Indian Carbon Market (ICM). India has officially entered the first phase of industrial decarbonization through sector-specific targets, paving way for the next phase expanding likely to petrochemicals, steel, and other high-emitting industries.