India To Introduce Emission Reduction Targets For Fossil Fuel-dependent Sectors
India will set carbon emission reduction targets for four fossil fuel-dependent sectors and launch a carbon trading market in April 2025, according to a Reuters report.
The four sectors are petrochemicals, iron and steel, cement and pulp and paper. Companies in these sectors will be the first to trade carbon credits on the new market. India is the world's third-largest emitter of greenhouse gases, after China and the United States.
The four sectors targeted by India's carbon emission reduction targets account for about 60 per cent of the country's industrial emissions. The Indian government estimates that the carbon trading market could generate up to USD 10 billion in revenue annually.
Companies that exceed their emission targets will earn carbon credits that can be sold to firms that fall short of their goals. The goal is to incentivise companies to reduce their emissions.
The carbon trading market is part of India's efforts to meet its greenhouse gas emission reduction targets. India has committed to reducing its ratio of greenhouse emissions to gross domestic product by 45 per cent of its 2005 level by 2030 and to net zero by 2070.
The proposed Indian carbon market is different from those created in developed countries. In developed countries, carbon markets set a limit on emissions and then allocate tradable permits, or credits, to emitter industries.
The targets for reducing each sector's emissions are being set by a committee comprising of key ministries such as environment, power, and renewable energy.
India already has a market for trading certificates in above-target energy savings for entities in 13 sectors.
Green energy companies formed a group in October to mediate between the government and industry. They included Adani Green, owned by billionaire Gautam Adani, Hero Future Energies, Ayana Renewable Power and global private equity major KKR's Virescent Infra.
