Government Puts Forward Draft Proposal For Setting Emission Targets For Petrochemical & Textile Sectors

25 June 2025 – The Indian government has put out a draft proposal that sets targets for reducing greenhouse gas (GHG) emissions from petrochemical units, petroleum refineries, and the textile sector. This is the first time that such rules are being applied to more than just heavy sectors. This shows that India is more committed to its Paris Agreement targets through stronger Nationally Determined Contributions (NDCs).

Who is Affected?

Under the Carbon Credit Trading Scheme (CCTS), public sector giants like IOC, BPCL, HPCL, GAIL, and ONGC, as well as private companies like Reliance Industries and Nayara Energy, must now follow India’s new GHG Emission Intensity Target Rules. The mandate sets goals for cutting emissions based on levels from 2023 to 2024. It will start in 2025–26. Companies who go above their commitments can earn marketable carbon credits, while those that don’t have to buy credits or pay environmental damages. This helps India reach its goal of being net-zero by 2070.

Sample Targets:

• IOC’s Guwahati Refinery: Reduce emissions from 7.78 tCO₂/tonne in FY24 to 7.03 tCO₂/tonne by FY27.
• BPCL’s Mumbai Refinery: Cut emissions from 3.97 tCO₂/tonne to 3.80 tCO₂/tonne in the same period.

Compliance and Penalties

Refineries that outperform their targets can earn carbon credit certificates. However, those falling short must purchase certificates to offset their excess emissions. Non-compliance could attract an environmental compensation, set at double the average carbon credit trading price for the compliance year, as determined by the Bureau of Energy Efficiency (BEE). The Central Pollution Control Board (CPCB) will enforce this penalty.

Broader Policy Context

India’s updated NDCs commit to a 45% reduction in emission intensity by 2030, compared to 2005 levels. While previous notifications covered aluminium, cement, chlor-alkali, and pulp & paper sectors, this new draft expands coverage significantly.

The Ministry of Environment, Forest and Climate Change (MoEFCC) issued the revised draft on June 24 and is now seeking feedback from stakeholders. The final notification is expected within 3–4 months.

Looking Ahead: India’s Carbon Market

The Centre is also preparing to launch India’s first carbon market by mid-2026, which will facilitate the trading of carbon credit certificates — a key step in operationalising the emission mandates.

This draft marks a significant policy shift, extending India’s climate responsibility deeper into core industrial sectors.

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