In a significant move towards aligning its industries with greenhouse gas emissions
reduction targets, India plans to establish carbon emission reduction mandates for
four pivotal sectors. These sectors, highly dependent on fossil fuels, include
petrochemicals, iron and steel, cement and pulp and paper.
Companies operating within these four sectors are expected to be the first
participants in India's carbon trading market, scheduled to launch in April 2025.
This initiative will empower companies to buy and sell carbon credits, providing a
flexible mechanism to meet their emissions reduction goals.
Under this system, companies that surpass their emissions reduction targets will
earn carbon credits, which can then be sold to firms that fall short of their own
goals. This incentivises emissions reduction efforts across industries.
The proposed carbon market in India is distinct from those in developed countries.
Instead of setting emissions limits and allocating tradable permits or credits, it
focuses on setting specific targets for emissions reduction within each sector.
This initiative represents a significant step in India’s commitment to combat
climate change and reduce carbon emissions from key industries.
