GEI Target Rules 2025 and Carbon Market

Why in the news?

— The Centre has notified the first legally binding Greenhouse Gas Emission Intensity (GEI) Target Rules, 2025.

— 4 high-emission sectors for which it has been notified are —aluminium, cement, chlor-alkali, and pulp and paper.

— The emission targets were notified by the Ministry of Environment, Forest and Climate Change on October 8.

Key takeaways 

— The Rules set targets on greenhouse gas (GHG) emissions per unit of product output.

— Among the large corporations that have been assigned targets under the Rules are Vedanta, Hindalco, Bharat Aluminium, JSW Cement, Ultratech, Nalco, JK Cement, Dalmia Cement, Shree Cement, Grasim Industries, and JK Paper.

Carbon Credit Trading Scheme (CCTS)

— The Rules will help operationalise the country’s domestic carbon market under the Carbon Credit Trading Scheme (CCTS), 2023.

— CCTS  was launched to create a framework to trade carbon credits, facilitate slashing of carbon dioxide (CO2) emissions and back India’s climate commitments under the Paris Climate Agreement of 2015.

Paris Climate Agreement of 2015 & India

— India has committed to reducing the emissions intensity of its gross domestic product (the amount of energy used per unit of GDP) by 45 per cent by 2030 compared to 2005 levels, as part of its domestic commitments under the global agreement.

Note: Under Article 17 of the Kyoto Protocol, the international treaty that committed industrialised countries and economies in transition to limit and reduce GHG emissions in accordance with agreed individual targets, countries that have emission units to spare — permitted but “unused” — were allowed to sell this excess capacity to countries that were over their targets.

GEI Rules

— Overall objective : “to promote the adoption of sustainable, cutting-edge technologies across traditionally high-emission industries, for addressing climate change”.

— 282 high-emission industrial units will have to comply with the mandatory targets for two years, 2025-26 and 2026-27.

— These 282 units consist of :

— The Rules define GEI targets in terms of tCO2e per equivalent output or product.

— tCo2e or tonnes of carbon dioxide equivalent is the standard unit used to measure the impact of all GHGs and not just CO2, based on their potential to warm the planet.

Greenhouse gas (GHG) emissions intensity or GEI

—  Greenhouse gas (GHG) emissions intensity or GEI is the amount of GHGs that are emitted per unit of product output.

— GHGs are gases that trap heat in the atmosphere and contribute to the “greenhouse effect” that raises surface temperature on Earth.

— The five most abundant GHGs in the atmosphere are water vapour, carbon dioxide, methane, nitrous oxide, and ozone. Other GHGs include synthetic fluorinated gases such as chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs).

— Since carbon dioxide is the principal greenhouse gas, this trade is spoken of as trading in carbon in the “carbon market”.

Carbon Credits

— The reduction of the CO2 gas will get the industries carbon credits in return, as part of the carbon credit trading scheme.

— These credits can then be traded on the domestic carbon market.

— The Bureau of Energy Efficiency will issue the carbon credits certificate.

— Industries that do not achieve their targeted emissions reduction will have to plug the shortfall by buying carbon credits from the carbon market.

— If industries fail to comply or contravene with the provisions of the GEI Rules, the Central Pollution Control Board is mandated to impose environmental compensation.

— Similar carbon credit markets have been operational elsewhere in the world — in Europe and China since 2005 and 2021 respectively.

— Carbon credits are traded through the Indian Carbon Market platform, with oversight of the Bureau of Energy Efficiency under the Union Ministry of Power.

PAT 

— While targets have been set for the reduction of GHG emissions intensity for the first time, a scheme to improve energy efficiency, known as PAT — Perform, Achieve, Trade — has been running since 2012.

Example:

— Through GEI targets industries will know what exactly to achieve in order to earn carbon credits. They will also have to create action plans towards achieving those goals.

— The ultimate objective is to push industries towards a low-carbon growth trajectory through reduction, removal or avoidance of GHG emissions.

— A cement plant can, for example, reduce its GEI by adopting cleaner and greener processes in the various stages of production. It could replace the use of coal with biomass, and adopt cleaner, more energy-efficient kilns.

BEYOND THE NUGGET: Major initiative of GOI to address climate change

— The National Clean Air Programme (NCAP) launched in 2019 covers 130 cities in 24 States and UTs with an objective to achieve substantial improvement in air quality, up to 40% reduction in particulate matter by 2025-26 from 2017-18.

— ‘PRANA’ portal has been launched to update the air quality data in real time.

— Extended Producer Responsibility (EPR) rules: They have been notified for plastic waste, tyre waste, battery waste, used oil waste and e-waste with the objective to enhance the circularity in economy and also help manage the wastes in environmentally sound manner.

— ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI)’: It has been launched to restore and promote mangroves as a unique, natural eco-system and for preserving and enhancing the sustainability of the coastal habitats.

— Nagar Van Yojana: The National Afforestation and Eco-development Board (NAEB) is implementing this scheme. with an objective to significantly enhance the trees outside forests and green cover, enhancement of biodiversity and ecological benefits to the urban and peri-urban areas apart from improving quality of life of city dwellers.

— The Mission LiFE (Lifestyle for Environment): It is a global initiative launched by India aimed at fostering sustainable lifestyles through mindful and deliberate consumption to protect the environment. It focuses on seven core themes:

1. saving water
2. conserving energy
3. reducing waster
4. managing e-waste
5. eliminating single-use plastics
6. promoting sustainable food systems
7. adopting healthy lifestyles

— Eco-mark Rules : It will encourage the demand for environment-friendly products aligning with the principles of ‘LiFE’, promote lower energy consumption, resource efficiency and circular economy. The scheme seeks to ensure accurate labelling and prevent misleading information about products.

— National Action Plan on Climate Change (NAPCC) : It provides the overarching framework for all climate actions and comprises missions in specific areas of solar energy, enhanced energy efficiency, sustainable habitat, water, sustaining Himalayan ecosystems, Green India, sustainable agriculture, human health and strategic knowledge for climate change.

(Refer: Centre notifies first legally binding emission targets for high-polluting sectors, How draft Greenhouse Gases Emissions Intensity Targets aim to help India meet climate goals by Nikhil Ghanekar)

Post Read Questions

Consider the following statements:

1. ‘PRANA’ portal has been launched by Government of India to update the cleanliness status of rivers.

2. High-emission sectors for which Greenhouse Gas Emission Intensity (GEI) Target Rules has been notified are —aluminium, cement, textile, and pulp and paper.

Which of the above given statements is/are true?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2