- India's Strategic Shift Towards Carbon Emissions Intensity Reduction: Policies and Progress in 2025
As India intensifies its commitment to sustainable development, the focus on carbon emissions intensity—a measure of greenhouse gas emissions per unit of economic output—has become central to its climate strategy. Recent policy developments and performance metrics underscore the nation’s proactive approach to balancing economic growth with environmental responsibility.
- Significant Reduction Achieved Ahead of Schedule
India has made remarkable progress in reducing its carbon emissions intensity. According to the government’s ‘Third National Communication’ report, the country achieved a 33% reduction in emissions intensity between 2005 and 2019, surpassing its initial target 11 years ahead of the 2030 deadline. This achievement highlights India’s success in decoupling economic growth from greenhouse gas emissions, with the GDP growing at an average annual rate of 7% while emissions increased by only 4% per year during the same period. The Economic Times+1ETGovernment.com+1ETGovernment.com+1The Economic Times+1
- Establishment of the Indian Carbon Market
In a significant policy move, the Government of India has initiated the development of a national carbon trading market. The Bureau of Energy Efficiency (BEE) has released a gazette notification outlining the framework for this market, aiming to provide a structured platform for trading carbon credits. This initiative is designed to incentivize emission reductions across various sectors by assigning economic value to carbon savings. Bee India
- Sector-Specific Emission Intensity Benchmarks
Starting from the fiscal year 2024-25, India plans to implement carbon emission intensity benchmarks and reduction targets for four key sectors: petrochemicals, iron and steel, cement, and pulp and paper. These sectors will be subject to three-year reduction targets, with the flexibility to trade carbon credits in the newly established carbon market. Companies exceeding their targets can sell surplus credits, while those falling short can purchase credits to meet compliance requirements. The Economic Times+2India Today+2The Indian Express+2
- Policy Reforms to Streamline Compliance
To facilitate easier compliance and encourage broader participation in emission reduction efforts, the Ministry of Environment, Forests and Climate Change issued a gazette notification in November 2024. This notification exempts certain low-impact industrial activities from dual approvals under the Water (Prevention and Control of Pollution) Act, 1974, and the Environment (Protection) Act, 1986. Industries classified under the “white category” by the Central Pollution Control Board, recognized for minimal environmental impact, are among those benefiting from this exemption. TeamLease Regtech+2Mondaq+2ChiniMandi+2
- Future Outlook
India’s proactive measures in reducing carbon emissions intensity and establishing a carbon trading market position the country as a leader in climate action among developing nations. With a target to reduce GDP emissions intensity by 45% from 2005 levels by 2030 and achieve net-zero emissions by 2070, India is setting a precedent for integrating economic development with environmental sustainability.ETGovernment.com+1India Today+1
- References:
- India’s emission intensity reduced by 33% between 2005 and 2019: Govt report. ET Government. LinkETGovernment.com+1The Economic Times+1
- Gazette notification for Indian Carbon Market. Bureau of Energy Efficiency. LinkBee India
- India to set emission reduction mandates for 4 sectors, to start carbon trading from 2025: Report. The Indian Express. LinkThe Indian Express+1The Economic Times+1
- New Exemption Notification For Industrial Plants By The Ministry Of Environment, Forests And Climate Change. Mondaq. LinkMondaq