India to set emission reduction mandates for 4 sectors, to start carbon trading from 2025 -sources

Jindal Stainless

26/09/2023 08:33

By Sarita Chaganti Singh
       NEW DELHI, Sept 26 (Reuters) - India will set carbon
emission reduction targets for four fossil fuel dependent
sectors, as the Asian country looks to align its industry with
the country's greenhouse emissions reduction target, two
government officials said. 
    The country will fix carbon emission intensity benchmarks
and reduction targets for three years for companies in
petrochemicals, iron and steel, cement and pulp and paper, two
government officials, who did not want to be named, told
Reuters. The market trading cycle will be annual, they said.
    The companies in the four sectors are also likely to be the
first ones to trade on the country's carbon trading market from
April 2025, the officials added, which will enable them buy and
sell carbon credits to met their goals. 
    Companies which exceed their targets earn carbon credits
that can be sold to firms which fall short of their goals. 
    "The mandates will be applicable from 2024-25 and the
(carbon) trade will start in 2025-26," one top government
official said.
    The targets will be aligned with the country's emission
intensity -  the total amount of greenhouse gas emissions
emitted for every unit increase of gross domestic product (GDP)
- reduction goals submitted to the United Nations, the officials
said.  
    India has committed to cutting its ratio of greenhouse
emissions to gross domestic product by 2030 to 45% of its 2005
level and to net zero by 2070.
    The carbon credits will be traded on the proposed carbon
market provided under a legislation cleared by the Indian
Parliament in December last year.    
    India's ministries of environment and power did not respond
to a query from Reuters. 
    The proposed Indian carbon market is different from those
created in developed countries as they set a limit on emissions
and then allocate tradable permits, or credits, to emitter
industries. 
    The targets for reducing each sector's emissions are being
set by a committee comprising of key ministries such as
environment, power and renewable energy.
    The rules and targets for the industries are likely to be
announced before December, the two officials said.
    India already has a market for trading certificates in
above-target energy savings for entities in 13 sectors. 
    Green energy companies formed a group in October to mediate
between the government and industry. They included Adani Green,
owned by billionaire Gautam Adani, Hero Future Energies, Ayana
Renewable Power and global private equity major KKR's Virescent
Infra.

 (Reporting by Sarita Chaganti Singh; Editing by Michael Perry)
 ((Sarita.ChagantiSingh@thomsonreuters.com;))