GEI Targets: India’s Bold Climate Strategy Unveiled with 5 Game-Changing Benefits for Industry

The draft Greenhouse Gases Emissions Intensity (GEI) Target Rules, 2025, mandate emissions reductions for 282 energy-intensive industrial units across aluminum, cement, pulp & paper, and chlor-alkali sectors. By setting 2023–24 as the baseline and phased targets for 2025–27, the policy operationalizes India’s Carbon Credit Trading Scheme (CCTS), linking compliance to tradable carbon credits. Companies exceeding targets earn credits, while laggards must purchase offsets or face penalties, fostering a competitive yet collaborative market.

Aligned with India’s Paris Agreement pledge to slash GDP emissions intensity by 45% by 2030, the rules prioritize cleaner technologies—like biomass adoption in cement production—to decouple industrial growth from emissions. Public feedback is invited over 60 days, ensuring stakeholder alignment. By expanding the scope of existing energy efficiency programs (e.g., PAT) to directly target GHGs, the framework balances regulatory accountability with economic incentives, positioning India as a proactive player in global climate governance while addressing challenges like compliance costs and data transparency. 

GEI Targets: India’s Bold Climate Strategy Unveiled with 5 Game-Changing Benefits for Industry

India’s Ministry of Environment, Forest, and Climate Change has introduced the draft Greenhouse Gases Emissions Intensity (GEI) Target Rules, 2025, marking a pivotal step in operationalizing the Carbon Credit Trading Scheme (CCTS) launched in 2023. These rules mandate emissions intensity reductions for 282 industrial units across four energy-intensive sectors: aluminum, cement, pulp & paper, and chlor-alkali. Companies like Ultratech, Vedanta, and Shree Cement are among the obligated entities required to meet sector-specific benchmarks.  

Key Provisions of the Draft Rules  

• Baseline and Targets: The rules establish 2023–24 as the baseline year, with phased reduction targets for 2025–26 and 2026–27. Emissions intensity is measured in tonnes of CO2 equivalent per unit of output (tCO2e), ensuring a standardized metric for accountability.  

• Compliance Mechanism: Industries exceeding targets earn carbon credits, tradable on India’s carbon market. Those falling short must purchase credits or face penalties enforced by the Central Pollution Control Board.  

• Transparency and Feedback: The draft is open for public consultation for 60 days, allowing stakeholders to propose adjustments before finalization. 

Why GEI Targets Matter for India’s Climate Strategy  

• Meeting Paris Agreement Commitments: India aims to reduce its GDP emissions intensity by 45% by 2030 (from 2005 levels). Targeting energy-intensive sectors—responsible for ~40% of industrial emissions—ensures measurable progress.  

• Driving Technological Shifts: By linking compliance to market incentives, the rules push industries to adopt cleaner technologies. For instance, cement plants might transition to biomass fuels or energy-efficient kilns to lower emissions per tonne produced.  

• Strengthening Carbon Markets: The CCTS creates a structured demand-supply dynamic for carbon credits. High-performing entities monetize excess credits, while laggards invest in offsets, fostering a competitive yet collaborative ecosystem. 

Synergy with Existing Policies 

The GEI rules build on the Perform, Achieve, Trade (PAT) scheme, which since 2012 has focused on energy efficiency. However, GEI expands the scope by directly targeting GHG emissions rather than energy use alone, aligning with global carbon accounting practices.  

Global Context and Market Potential 

While the EU and China have mature carbon markets, India’s CCTS is tailored to its developmental needs. The Bureau of Energy Efficiency oversees trading, ensuring alignment with national priorities. For context, the EU’s market covers ~40% of its emissions; India’s initial focus on select sectors allows phased scalability.  

Challenges and Opportunities  

• Compliance Costs: Smaller firms may struggle with upfront investments in green tech, necessitating government support or access to green financing.  

• Data Integrity: Robust monitoring, reporting, and verification (MRV) systems are critical to prevent greenwashing and ensure credit authenticity.  

• Market Liquidity: A well-functioning carbon market requires active participation, price stability, and regulatory clarity to attract domestic and international investors. 

The Road Ahead 

India’s GEI Targets signal a strategic shift from voluntary climate action to regulated accountability. By embedding market mechanisms into policy, the framework not only incentivizes decarbonization but also positions India as a proactive player in global climate governance. As industries adapt, the ripple effects—from job creation in clean tech to improved air quality—could redefine sustainable growth in the world’s third-largest emitter.