AI Summary: India has finalized the Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025, setting legally binding carbon limits for 282 industrial units. Covering sectors like Cement and Aluminium, the rules reward efficiency with tradable Carbon Credit Certificates (CCCs) and penalize non-compliance at double the market price.
India has officially shifted from voluntary climate pledges to a mandatory regulatory era. On October 8, 2025, the Ministry of Environment, Forest and Climate Change (MoEFCC) notified the final Greenhouse Gas Emission Intensity (GEI) Target Rules.
As part of the Carbon Credit Trading Scheme (CCTS), these rules are a cornerstone of India’s journey toward Net Zero 2070. If you are a business owner, NGO, or environmental consultant, here is exactly what you need to know.
1. What are the India Carbon Credit Rules 2025?
Officially known as the Greenhouse Gas Emission Intensity (GEI) Target Rules, they establish a “baseline-and-credit” system. Instead of capping total production, the rules cap emission intensity—the amount of CO2 emitted per tonne of product produced.
The Equation for Success:
$$Credits\ Issued = (Target\ Intensity – Achieved\ Intensity) \times Total\ Production$$
2. Which Sectors and Units are Covered?
In this initial compliance phase (FY 2025–26 and 2026–27), 282 obligated entities across four energy-intensive sectors must comply.
| Sector | No. of Units | Avg. Reduction Target (by 2027) |
| Cement | 186 | 4.7% – 7.6% |
| Pulp & Paper | 53 | Up to 15% |
| Aluminium | 13 | 2.8% – 7.06% |
| Chlor-Alkali | 30 | 3.3% – 11% |
Note: Draft targets for five additional sectors, including Iron & Steel and Textiles, were released in June 2025 and are expected to be finalized soon, bringing the total to ~740 entities.
3. How to Earn and Trade Carbon Credit Certificates (CCCs)
The Bureau of Energy Efficiency (BEE) manages the issuance of certificates. One CCC represents 1 tonne of CO2 equivalent reduced or avoided.
Monitoring: Units track Scope 1 (direct) and Scope 2 (indirect) emissions.
Verification: An Accredited Carbon Verification Agency (ACVA) must audit the data.
Issuance: If you beat your target, BEE issues CCCs to your account on the Indian Carbon Market (ICM) Portal.
Trading: These can be sold to non-compliant units via approved power exchanges (like IEX or PXIL).
4. Penalties for Non-Compliance
Missing your target in 2025 is a costly business decision. If a unit fails to meet its intensity goal or purchase enough credits to offset the gap:
- Environmental Compensation: They must pay a penalty set at twice the average trading price of carbon credits for that year.
- Timeline: Penalties must be paid within 90 days.
Frequently Asked Questions (FAQ)
What is the baseline year for the 2025 Rules?
The baseline year for calculating emission intensity is FY 2023–24.
Can small businesses participate?
While the Compliance Mechanism targets large industrial units, the Offset Mechanism allows smaller entities and green startups to voluntarily register projects and earn tradable credits.
How does this link to the EU’s CBAM?
By adopting these legally binding domestic targets, Indian exporters (especially in Cement and Aluminium) are better prepared for the Carbon Border Adjustment Mechanism (CBAM) in Europe.
Also Read:– The 5 Best Greenhouses of 2023
