Emission intensity targets to be released by month-end

Sub : Env

Sec: Climate Change

Context:

The Union government is set to announce emissions intensity targets for nine industrial sectors by the end of February, a key step in launching India’s carbon trading scheme.
Industries will then have a year to implement compliance measures, with carbon credit trading expected to start by October 2026.

Background:

The Bureau of Energy Efficiency (BEE) under the Union Ministry of Power announced a carbon credit trading scheme in June 2023.
Follow-up notifications in March 2024 mandated compliance for certain industrial sectors.
However, emissions intensity targets have not yet been specified, which prevents the generation and trading of carbon credits.

Objective of the scheme:

The carbon credit trading scheme aims to reduce, remove, or avoid greenhouse gas (GHG) emissions by pricing emission reductions.
It functions by trading carbon credit certificates.

Global Carbon Markets vs Indian Model:

European Model:
- Every carbon credit represents one tonne of CO₂ prevented from entering the atmosphere.
- Companies with mandated emission caps can buy or sell credits based on their compliance.
Indian Model:
- Industries are not required to cut overall carbon emissions but must improve efficiency to lower emissions intensity.
- Example: A steel factory can burn less coal or reuse heat to produce the same amount of steel more efficiently.

Emissions Intensity Targets:

Emissions intensity refers to the amount of greenhouse gases emitted per unit of activity.
The nine sectors required to comply include iron and steel, aluminium, chlor-alkali, cement, fertilizers, pulp and paper, petrochemicals, petroleum refineries, and textiles.
Additionally, voluntary carbon offset markets, including afforestation projects, may begin trading this year.
India aims to reduce its emissions intensity by 45% of 2005 levels by 2030.