draft emission cut targets for iron and steel sector

 Centre issues fresh draft emission cut targets for iron and steel sector



notification to set greenhouse gas emission intensity (GEI) 



The Centre has once again issued a draft notification to set greenhouse gas emission intensity (GEI) targets for the intensive iron and steel sector and to align them under India’s carbon credit trading system (CCTS).


India’s Carbon Credit Trading Scheme (CCTS) 



is a market-based mechanism under the Indian Carbon Market (ICM), established under the Energy Conservation Act. It shifts the focus from energy efficiency to direct greenhouse gas (GHG) emission intensity reductions, helping India achieve its Net Zero goal by 2070. [1, 2, 3, 4]
1. Key Objectives & Design
  • Cap-and-Trade: Government sets mandatory GHG emission intensity targets per unit of production for large, energy-intensive industries.
  • Carbon Credit Certificates (CCC): Over-achieving entities that emit below their target earn CCCs, while under-achievers must purchase these credits to cover their shortfall or face penalties.
  • 1 CCC = 1 Ton of CO₂ equivalent. [1, 2, 3, 4]
2. Institutional Framework

  • Administrator: The Bureau of Energy Efficiency (BEE)
  • Regulator: The Central Electricity Regulatory Commission (CERC)
  • Registry: Grid Controller of India Limited
  • Oversight Body: National Steering Committee for Indian Carbon Market (NSCICM) [1, 2, 3, 4, 5]


MoEFCC) issued the draft 


The Ministry of Environment, Forest and Climate Change (MoEFCC) issued the draft on June 26 and made it public on July 2. 


It has set emission reduction targets for 255 industrial units, including the sector’s giants such as 

  • JSW Steel, 
  • Tata, 
  • SAIL (Steel Authority of India), 
  • and ArcelorMittal Nippon Steel, among others.


already issued on June 23, 2025 ?

Draft targets for the iron and steel sector were already issued on June 23, 2025, along with aluminium (second aluminium), petroleum refinery, petrochemical and textile sectors.


 While final targets for other sectors 

were notified in January 2026, the Environment Ministry has issued a revised draft for the iron and steel sector with marginal changes to the targets, but without any explanation for the fresh draft.


 2023-24 is as the year for baseline

The draft notification lists 2023-24 as the year for baseline product output and baseline emission intensity, 


and 2026-27 as the compliance-year target for 

  • individual steel plants, 
  • sponge iron units and
  •  ferro-alloy manufacturers. 
  • A 60-day window has been given to submit objections and suggestions on the draft.


targets in terms of tonnes of carbon dioxide equivalent (tCO2e)


draft defined targets in terms of tonnes of carbon dioxide equivalent (tCO2e), which is used to measure the impact of all greenhouse gases and not just CO2, based on their warming potential.


The draft has set GEI targets only for 2026-27, while the 2025-26 column has been left blank.


GEI - greenhouse gas emission intensity (GEI) targets 


is the amount of greenhouse gases (GHG) emitted per unit of product output, such as the quantum of gases released while producing cement.


CCTS was launched in 2023 


to create a framework that incentivises emission reduction through a market-based mechanism and to help achieve India’s climate action goals.


The Centre has already finalised emission reduction targets for eight sectors 

– 

  • aluminium, 
  • cement, 
  • chlor-alkali, 
  • pulp and paper, 
  • secondary aluminium, 
  • petroleum refinery, 
  • petrochemical 
  • and textile.


nationally determined contributions commitments


In March this year, India revised its nationally determined contributions commitments on climate action under the United Nations Framework Convention on Climate Change and the Paris Agreement. 


This included a revision of the target to reduce emissions intensity of Gross Domestic Product, which was set at 47% by 2035, compared to 2005 levels.


India has committed to reduce 

the emissions intensity of its gross domestic product — the amount of energy used per unit of GDP — to 47% by 2030 compared to 2005 levels as part of its domestic commitments under the agreement.


The targets set in previous rounds covered 490 high-emission industrial units.


The CCTS, which was notified in 2023, created an overarching framework for the Indian carbon market. The objective was to slash or avoid GHG emissions from sectors whose processes emit more pollutants and whose operations are hard to decarbonise.


 pay environmental compensation

Each obligated industry is assigned a GEI target based on emissions per unit of output. 


Those industries that meet or outperform their target earn carbon credit certificates, which can be sold to industries that are falling short. 


Industries that do not comply must pay environmental compensation, which is equal to twice the average carbon credit traded price.

SOURCE IE 

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