🗞️ Why in News The Ministry of Environment, Forest and Climate Change (MoEFCC) amended, on 22 September 2026, the greenhouse gas emission intensity (GEI) targets it had notified in January for petroleum refineries and the textile sector under India’s Carbon Credit Trading Scheme (CCTS), revising baselines for several Indian Oil refineries and keeping only the 2026-27 compliance targets.
What Changed
| Item | Detail (as compared by The Indian Express) |
|---|---|
| Original notification | GEI targets for refineries and textiles notified in January 2026 |
| Amendment | 22 September 2026 |
| Coverage | 21 petroleum refineries (Reliance, Indian Oil, BPCL, Chennai Petroleum, HPCL, MRPL, Nayara Energy, Numaligarh) and 173 textile units |
| Baselines revised | Indian Oil refineries at Digboi, Gujarat, Guwahati, Haldia, Mathura, Panipat and Paradip, with matching changes in reduction targets |
| Compliance years | Only the 2026-27 targets retained; the 2025-26 targets removed |
| Unit | Tonnes of carbon dioxide equivalent (tCO2e) per unit of output |
Why the baseline matters. A GEI target is set against a baseline emission intensity, the reference level against which later performance is judged. Changing the baseline changes how much each unit must cut, and so how many credits it can earn or must buy. Revisions can improve accuracy, but, as the Centre for Science and Environment’s Parth Kumar told the newspaper, late notifications and frequent changes create uncertainty for industry and the market; firms need “a predictable timeline with stable targets”.
How the Carbon Market Works
| Element | Detail |
|---|---|
| Legal basis | The CCTS was notified in 2023 by the Ministry of Power under the Energy Conservation Act, 2001, as amended in 2022 to provide for a carbon credit trading scheme. The sector GEI targets are notified by the Environment Ministry as rules under the Environment (Protection) Act, 1986, which is why MoEFCC made this amendment |
| Metric | Emission intensity: greenhouse gases emitted per unit of output, not total emissions |
| Obligated entities | 490 units in eight hard-to-abate sectors: aluminium, cement, chlor-alkali and pulp and paper (targets notified October 2025, 282 entities) and petroleum refineries, petrochemicals, textiles and secondary aluminium (notified 13 January 2026, 208 entities); a revised draft for iron and steel is under consideration |
| Earning credits | Units that beat their target earn carbon credit certificates, which they can sell |
| Falling short | Units that miss their target must buy certificates; non-compliant units pay environmental compensation of twice the average traded price of a credit, enforced by the Central Pollution Control Board |
| Administrator | The Bureau of Energy Efficiency (BEE) under the Ministry of Power |
Intensity, not a cap. India’s market sets targets per tonne of product, not an absolute cap on emissions. This lets output grow while pushing each unit to become cleaner, consistent with India’s climate pledges: a 45 per cent cut in the emissions intensity of GDP by 2030 from 2005 levels (updated NDC, 2022), raised to 47 per cent by 2035 in the NDC for 2031-35 that the Union Cabinet approved in March 2026, and net zero by 2070. An intensity scheme does not guarantee that total emissions fall.
From PAT to CCTS. The Perform, Achieve and Trade (PAT) scheme, run by BEE since 2012, traded energy-saving certificates among energy-intensive units. The CCTS carries the same logic from energy to greenhouse gases, and it gives exporters a domestic carbon price to point to as the European Union’s Carbon Border Adjustment Mechanism takes effect.
Why It Matters
For industry. Refining and textiles are large, export-linked sectors. Clear, stable targets let firms plan investments in efficiency, fuel switching and cleaner processes; shifting targets delay those decisions.
For the market. A carbon market needs scarcity and trust. If baselines are revised often or late, the value of credits becomes uncertain, and trading stays thin. Early transparency about methodology and data, and fixed compliance periods, build confidence.
For climate policy. Sector targets are the operational core of the CCTS. Covering more sectors, and eventually moving towards absolute caps in some, will decide how much the market contributes to India’s NDC.
UPSC Relevance
GS Paper 3. Conservation, environmental pollution and degradation; climate change; infrastructure: energy; industrial policy.
A question worth preparing. “An intensity-based carbon market balances growth and decarbonisation, but its credibility depends on stable targets.” Discuss with reference to India’s Carbon Credit Trading Scheme. (250 words)
The Mains framing. Explain intensity versus cap-and-trade. Describe the CCTS architecture (the 2022 amendment to the Energy Conservation Act, BEE, sector GEI targets, certificates, compensation for non-compliance). Use the September amendment to show the tension between data accuracy and regulatory stability. Close with links to the NDC, net zero 2070, and the EU CBAM, and with reforms: fixed compliance cycles, published methodologies and a path to wider coverage.
📌 Facts Corner, Knowledgepedia
Prelims, statement-ready facts:
- MoEFCC amended GEI targets for refineries and textiles on 22 September 2026; they were first notified in January 2026.
- The amendment covers 21 petroleum refineries and 173 textile units.
- Only the 2026-27 compliance targets were retained; 2025-26 targets were removed.
- The CCTS was notified in 2023 under the Energy Conservation Act, 2001, as amended in 2022.
- GEI targets now cover 490 entities in eight sectors, including petrochemicals and secondary aluminium.
- GEI targets are notified by MoEFCC as rules under the Environment (Protection) Act, 1986.
- Non-compliance attracts compensation of twice the average traded price of a carbon credit.
- NDC: cut emissions intensity of GDP by 45 per cent by 2030 (2022 update) and 47 per cent by 2035 (NDC 2031-35), from 2005.
Prelims, the traps:
- The CCTS sets intensity targets (per unit of output), not an absolute cap on total emissions.
- The PAT scheme traded energy-saving certificates; the CCTS trades carbon credit certificates.
- GEI targets are expressed in tCO2e, covering all greenhouse gases by warming potential.
Mains, arguments and keywords:
- Stable targets and published methodologies are what give a carbon market scarcity and trust.
- Keywords: emission intensity, baseline, carbon credit certificate, hard-to-abate sectors, CBAM, NDC, net zero 2070.
Interview, be ready for:
- “Why not an absolute cap like the EU?” A developing economy must grow; intensity targets allow that, though they do not guarantee total emissions fall.
Sources: Indian Express, Bureau of Energy Efficiency, PIB
Source: Carbon Market Targets Revised for Refineries and Textile Units Under the Carbon Credit Trading Scheme — Ujiyari.com | Free UPSC & State PCS Current Affairs
