Greenhouse Gases Emission Intensity (GEI) Target Rules, 2025 ( UPSC Prelims)

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News Context

The Union Environment Ministry announced the Greenhouse Gases Emission Intensity (GEI) Target Rules, 2025.

About the Rules

     ○ Proposes legally binding GHG emission targets for over 400 industrial units.
      ○ It notified GEI Targets for four energy-intensive sectors (aluminium, cement, chlor-alkali, and pulp & paper) ensuring emission cuts.
        ○ Targets for 5 additional sectors: iron and steel, fertilizer, petroleum refining, petrochemicals, and textiles, covering over 460 additional industrial installations were also established separately.
  ● GEI means Greenhouse Gases Emission Intensity in tCO2e/equivalent (tonnes of Carbon Dioxide equivalent) output or product.  
    ● Emissions Intensity measures GHG emitted per unit of output—indicating carbon efficiency.  
        ○ EI doesn't always mean total emissions are falling; it reflects cleaner production progress.
  ● GEI Targets Calculation as per Bureau of Energy Efficiency's methodology, specific to each obligated entity as listed in the Schedule.  
  ● Obligated Entities must meet GEI targets annually as per the Carbon Credit Trading Scheme, 2023.  
        ○ May also purchase carbon credit certificates from the Indian Carbon Market (ICM) to offset shortfalls.
  ● Environmental Compensation to be imposed by Central Pollution Control Board (CPCB), equal to twice the average price at which carbon credit certificate is traded in the compliance year, payable within 90 days.  
  ● Non-compliance addressed under Environmental Protection Act, 1986.  

About Carbon Credit Trading Scheme (CCTS)

Objective: Reduce GHG emissions by advocating for carbon pricing (which imposes a cost on GHG emissions).
      ○ Announced under the Energy Conservation Amendment Act (ECA), 2022.
      ○ Functions as an intensity-based baseline-and-credit system, with targets specified as tonnes of CO2 equivalent per unit of product output.
      ○ The program addresses both direct emissions from fuel combustion and industrial processes (Scope 1) and indirect emissions from electricity and heat consumption (Scope 2).
        ○ Initially, the system includes CO₂ and perfluorocarbons (PFCs).
  ● Key components:  
    ● Compliance Mechanism (For Obligated Entities): Entities emitting less than their designated targets receive Carbon Credit Certificates, which can be traded on power exchanges.  
          ○ On the other hand, entities not meeting their targets must purchase and surrender an equivalent number of CCCs to ensure compliance.
    ● Voluntary Offset Mechanism: Allows other sectors to register their projects for GHG emission reduction, removal, or avoidance, in return for Carbon Credit Certificates.  
  ● Administrator: Bureau of Energy Efficiency (BEE)  
  ● Regulator of Carbon Trading: Central Electricity Regulatory Commission (CERC)  

GHG Emissions in India: 4th Biennial Update Report (BUR-4)

 ● Total GHG emissions amount to 2,959 million tonnes of CO₂ when excluding Land Use Change and Forestry (LULUCF).  
      ○ When LULUCF is factored in, the emissions are 2,437 million tonnes of CO₂.
      ○ The historical share of cumulative global GHG emissions is 4% annually between 1850 and 2019, despite representing 17% of the world’s population.
      ○ There was a 7.93% reduction in GHG emissions in 2020 compared to 2019.
      ○ Emissions by sector, in decreasing order, are: Energy (75.66%); Agriculture (13.72%); Industrial Process & Product Use (IPPU) (8.06%); Waste (2.56%).
      ○ Emissions by gases, in decreasing order, are: Carbon dioxide (80.53%); Methane (13.32%); Nitrous oxide (5.13%); Others (1.02%).

India’s other Market Mechanisms for Emissions Reduction

• Performance Achieve and Trade (PAT) Scheme: Aims to lower Specific Energy Consumption (SEC) in industries with high energy usage by distributing Energy Savings Certificates (ESCerts).
 • Renewable Energy Certificates (REC): Certificates available for trading to assist in fulfilling the Renewable Purchase Obligation (RPO).
 • Rate-based Emissions Trading System (ETS): Represents India's shift towards a performance-oriented emissions trading framework with the integration of CCTS. Emphasizes enhancing emission intensity instead of focusing solely on absolute emission reductions.

About Carbon Markets

Carbon markets are trading platforms where carbon credits are exchanged. Each carbon credit represents a reduction, sequestration, or avoidance of 1 tonne of CO₂ (or equivalent greenhouse gas emissions). Businesses or individuals can utilize these markets to offset their GHG emissions by buying carbon credits from organizations that actively reduce or eliminate GHGs. This process facilitates the transfer of resources from the private sector to the State.