India close to finalising industry carbon targets ahead of COP meet

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Last Updated25/10/2024

In the run-up to the 29th edition of the Conference of Parties (CoP) in Baku, Azerbaijan, next month, India is at an advanced stage in deciding on the carbon dioxide emissions intensity targets for select industries.

India is nearing finalization of its carbon dioxide emissions intensity targets for specific industries, according to a senior Environment Ministry official.
These targets are essential for the establishment of a ‘compliance’ carbon market, where companies must stay within emissions limits or purchase carbon credits from those with surplus reductions.
Every tonne of CO2 saved beyond the target earns one credit, which can be traded in the market.

India is set to launch its compliance carbon market in the 2025-26 financial year, as required by the Bureau of Energy Efficiency’s (BEE) December 2023 notification. The National Steering Committee for Indian Carbon Market (NSC-ICM) will oversee the functioning of this market.
The emissions caps for industries will likely build upon India’s existing Perform, Achieve, and Trade (PAT) Scheme, which focuses on energy efficiency. Hard-to-abate sectors, including aluminium, cement, fertiliser, iron and steel, petrochemicals, and textiles, are expected to fall under these caps, as reducing emissions in these industries involves high costs.

At COP29 in Baku, Azerbaijan, in November, the focus will be on developed countries committing to a new financial goal for climate transfers to developing countries. Carbon markets, under the UN’s climate charters, are expected to gain formal approval.
Article 6 of the Paris Climate Agreement, which outlines the framework for international carbon trading, will also be a key topic of discussion. However, some issues on credit accounting remain unresolved and are expected to be addressed during the negotiations.