India is stepping up its climate action with recent changes to its emission regulations. The Ministry of Environment, Forest and Climate Change has introduced the Greenhouse Gas Emission Intensity Target (Amendment) Rules, 2025. Announced on January 13, 2026, this move broadens the Carbon Credit Trading Scheme by involving more energy-heavy industries in mandatory emission reductions.
This amendment builds on existing rules that currently target sectors like aluminium and cement. It now includes four new sectors: secondary aluminium, petroleum refineries, petrochemicals, and textiles. These industries contribute significantly to India’s industrial emissions. Their inclusion is aimed at encouraging cleaner processes and better energy efficiency.
A key update is the new “Second Schedule,” which sets specific emission intensity targets for certain companies, called “Obligated Entities.” These targets are based on production efficiency, using 2023–24 as a baseline. This allows industries to grow while still reducing their environmental impact.
For petroleum refineries, a Normalized Refinery Generation Factor (NRGF) will help adjust emission targets. This ensures that different refineries, which can vary greatly in scale and complexity, are evaluated fairly based on their unique characteristics.
The compliance period is divided into two phases. The first phase runs from January to March 2026, while the second phase extends into 2026–27. This staggered approach gives industries ample time to adapt while still pushing for significant reductions in emissions.
Major players like Bharat Petroleum, Indian Oil, and Reliance Industries must now align with these new standards. Textile firms such as Madura Coats and Vardhman Yarns are also on the list of obligated companies. Meeting these emission intensity targets is now a critical part of their operations.
This amendment aims to foster a robust domestic carbon credit market. Companies hitting their targets can earn carbon credits to trade. Those who don’t might need to buy credits or face penalties. This market-driven approach encourages innovation and improved efficiency, guiding India toward its net-zero emissions goal.
Experts, including environmental economists, see this as a transformative step for India’s industrial landscape. According to a recent report from the International Energy Agency, implementing such regulations could reduce emissions by up to 30% in key sectors by 2030. This reflects a global trend where countries are increasingly adopting market-based solutions to tackle climate change.
User reactions on social media indicate a mix of optimism and concern. Many support the push for cleaner practices, while some worry about the financial impact on smaller businesses. Yet, studies show that companies investing in sustainable technologies often see long-term savings through increased efficiency, proving that environmental responsibility can align with economic growth.
As India navigates these changes, it stands at a crucial intersection of industry and environmental stewardship. The success of these policies will ultimately depend on collaboration between the government and industries, pushing towards a more sustainable future.
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Carbon Credit Trading Scheme,Decarbonization,GHG rules,India,regulatory affairs
