In order to connect its economy with the nation’s goal of reducing greenhouse gas emissions, India will set carbon emission reduction objectives for four sectors that rely on fossil fuels, according to two government officials.
According to two unnamed government officials who spoke to Reuters, the nation would set carbon emission intensity standards and reduction objectives for three years for businesses involved in petrochemicals, iron and steel, cement, and pulp and paper. They stated that the market’s trading cycle will be yearly.
According to the officials, the businesses in the four sectors would also probably be the first to trade on the nation’s carbon trading market starting in April 2025, giving them the opportunity to purchase and sell carbon credits to achieve their objectives.
Companies that surpass their targets receive carbon credits, which they can resell to companies that don’t meet their targets.
One high-ranking government official stated, “The mandates will be applicable from 2024 to 2025, and the (carbon) trade will start in 2025 to 2026.”
The targets will be in line with the country’s emission intensity goals, which are reported to the UN and measure the total amount of greenhouse gas emissions for every growth in gross domestic product (GDP).
India has pledged to reduce its country’s greenhouse gas emissions to 45% of 2005 levels by 2030 and to net zero by 2070.
In accordance with laws approved by the Indian Parliament in December of last year, the carbon credits will be exchanged on the projected carbon market.
India’s power and environment ministries did not react to a Reuters inquiry.
The proposed carbon market in India differs from those established in Western nations in that they set an emission cap and then distribute tradable permits, or credits, to companies that emit the most.
A committee made up of representatives from important ministries such as the environment, power, and renewable energy is responsible for setting the goals for lowering emissions in each sector.
According to the two officials, the regulations and objectives for the industries will probably be revealed before December.
For organisations in 13 sectors, India already has a market for exchanging certifications of energy savings above target.
In order to mediate between the government and industry, green energy companies established a committee in October. They included the billionaire Gautam Adani’s Adani Green, Hero Future Energies, Ayana Renewable Power, and Virescent Infra, a leading global private equity firm.
