Centre Proposes Revised Carbon Emission Targets for 255 Iron and Steel Units Under Carbon Credit Trading System

The Government of India has issued a revised draft notification proposing greenhouse gas emission intensity (GEI) targets for 255 iron and steel manufacturing units under the Carbon Credit Trading System (CCTS). Released by the Ministry of Environment, Forest and Climate Change, the draft has been opened for public consultation, with stakeholders invited to submit their feedback within 60 days.

The revised proposal is a key step in India’s ongoing efforts to reduce industrial emissions while supporting sustainable economic growth. The draft covers several of the country’s leading steel producers, including JSW Steel, Tata Steel, Steel Authority of India (SAIL), and ArcelorMittal Nippon Steel.

The revised notification follows an earlier draft issued in June 2025. While emission reduction targets for sectors such as aluminium, petroleum refining, petrochemicals and textiles were finalised in January 2026, the iron and steel sector has now received an updated draft with minor revisions before final implementation.

The proposed framework uses the financial year 2023-24 as the baseline for measuring production and greenhouse gas emission intensity. Compliance targets have been established for the 2026-27 financial year. Greenhouse gas emission intensity is measured in tonnes of carbon dioxide equivalent (tCO2e), which considers the combined warming impact of all greenhouse gases.

Launched in 2023, the Carbon Credit Trading System is designed to encourage industries to reduce emissions through a market-based mechanism. Companies that perform better than their assigned targets will earn carbon credit certificates that can be traded with industries unable to meet their emission limits. Businesses failing to comply will be required to pay environmental compensation linked to carbon credit prices.

The revised draft also supports India’s long-term climate commitments, including the national goal of reducing the emissions intensity of its Gross Domestic Product by 47 percent by 2035 compared to 2005 levels.

With the steel sector being one of India’s largest industrial emitters, the proposed emission targets are expected to drive investments in cleaner production technologies, energy efficiency and sustainable manufacturing practices. Industry feedback over the next two months will play an important role before the government finalises the emission norms for one of the country’s most critical manufacturing sectors.