The Union Environment Ministry has issued a draft notification to bring iron and steel sectors under the Carbon Credit Trading Scheme (CCTS), setting greenhouse gas (GHG) emission intensity reduction targets for over 250 factories to reduce emissions.
The draft dated June 26 cites the greenhouse gas emission intensity targets for plants under the Environment (Protection) Act 1986. It was released to 255 major plants for public comment for 60 days before the rules were finalized.
The proposed rules expand the scope of the CCTS regime, notified in 2023, which covers sectors such as aluminium, cement, pulp and paper, petroleum refineries, petrochemicals and textiles.
Emission reduction targets are set for 2026-2027, with 2023-2024 serving as the baseline. Carbon credits will be awarded to those who meet emissions targets. Those who fail to meet these requirements will be required to purchase carbon credits on the local market, thus incentivizing a shift towards cleaner, more efficient technology.
“…in exercise of the powers conferred under Sections 3, 6 and 25 of the Environment (Protection) Act, 1986…the Central Government hereby proposes to issue the draft notification…and it is hereby notified that the said notification shall be taken into consideration after the expiry of a period of sixty days from the date on which the Gazette copies containing such draft notification are made available to the public,” the notification said.
Experts say that the steel sector is one of the largest industrial sectors that cause emissions in the country, which makes its inclusion an important step in activating the local carbon market.
Parth Kumar of the Center for Science and Environment’s Sustainable Manufacturing Unit said the revised draft targets were a little late but an important step in operationalizing the CCTS system for the steel sector. “Given the complexity and diversity of steel production methods, it is encouraging to see the process moving forward. Initial targets are likely to lead to improvements through energy efficiency and other relatively low-cost operational measures.”
The real test will be whether future compliance cycles begin to influence long-term investment decisions and accelerate the adoption of low-carbon technologies that lead to a deeper structural shift in the sector’s emissions trajectory, Kumar said. He added that the choices made today, as the world’s second-largest steel producer, will shape the sector’s emissions trajectory for decades to come.
The draft notification covers some of India’s largest producers and sets targets for reducing their emissions.
