India is set to reduce carbon emission for four fossil fuel dependent sectors. This comes amidst the country wanting to cut industrial emissions in order to meet its targets.
India will set targets for firms involved in petrochemicals, iron and steel, cement and pulp and paper. This will be done over the course of the next three years, according to official sources close to Reuters.
The companies in these four sectors are also probable to be the first ones to trade in India's carbon trading market from April 2025, the officials added. This will enable the firms to buy and sell carbon credits to meet their goals.
Companies which exceed their targets can earn carbon credits in return. These credits can then be sold to corporates that fail to meet their goals.
"The mandates will be applicable from 2024-25 and the (carbon) trade will start in 2025-26," a top government official was quoted as saying.
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.
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 the environment, power, and renewable energy is responsible for setting the goals for lowering emissions in each sector.
According to the officials, the regulations and objectives for the industries will probably be revealed before December.
Adani Green, Hero Future Energies, Ayana Renewable Power and global private equity major KKR's Virescent Infra, formed a group in October 2022 to mediate between the government and industries.