The recent notification of Greenhouse Gas (GHG) emission intensity targets for four key industrial sectors—Aluminium, Cement, Chlor-alkali, and Pulp and Paper—is a crucial milestone for India’s domestic Carbon Credit and Trading Scheme (CCTS).
However, a deep dive into the policy implementation reveals a critical flaw that is undermining our climate ambition and putting Indian industry at a disadvantage on the global stage.
The Domestic Setback: Diluted Targets and Lost Potential
The targets, which are designed to kickstart compliance for the country’s nascent carbon market, were issued months late. The compliance year for these four sectors began in April 2025, but the targets were only officially notified in October 2025—midway through the cycle.
This massive bureaucratic delay forced a pro-rata downward revision in the targets for all obligated entities. The cost? A tangible reduction in mitigation potential of over 2 million tonnes of GHG emissions. This policy lag risks two major issues:
- Weakening the CCTS: Diluted targets lead to an oversupply of carbon credits, echoing past challenges in the PAT scheme, thereby reducing the financial incentive for industries to undertake expensive, transformational decarbonization.
- Modest Ambition: Key heavy-emitting sectors like Cement and Aluminium have been given less stringent targets compared to smaller sectors, failing to drive the “transformational change” required for deep industrial decarbonization.
The Global Reality: The Clock is Ticking (and Tariffs Are Rising)
While India’s CCTS is a foundational step, the delay and dilution are particularly concerning when viewed against aggressive global cues from developed economies: Global Action & Impact on India
EU’s ETS Rigor
The European Union’s Emissions Trading System (EU ETS) is the world’s largest and most stringent, targeting 55% net emission cuts by 2030 and pricing carbon around $70 per tonne—setting a high standard for global trade.
The CBAM Threat
The EU’s Carbon Border Adjustment Mechanism (CBAM) is set to impose carbon tariffs on imports like steel, aluminum, and cement starting soon. India’s continued reliance on carbon-intensive production, coupled with diluted domestic targets, means our exporters will pay higher tariffs at the border. This directly threatens billions of dollars in exports and increases the landed cost of Indian goods, effectively penalizing policy delays.
US/China Investment
Countries like the US are pouring massive subsidies and tax credits (e.g., the Inflation Reduction Act) into clean technologies like green hydrogen and CCS, accelerating their industrial shift. China, with the world’s largest ETS by covered emissions, is rapidly deploying clean energy infrastructure.
Why We Are Lagging in the “Real World”
The fundamental distinction is that while India’s goal is currently to reduce emissions intensity (GHG per unit of GDP/output) to allow for necessary economic growth, the rest of the world is rapidly moving toward absolute emissions caps and heavy investment in breakthrough clean technology.
The delay in domestic target notification is not just a policy footnote; it is a direct failure of implementation that translates into a commercial penalty and risks locking India into high-carbon infrastructure for decades.
To secure our position as a rising economic power and meet our Net Zero by 2070 pledge, we need more than ambitious announcements. We need policy foresight, bureaucratic efficiency, and stringent enforcement that match the pace of global market mechanisms. Climate leadership requires moving from drafting ambitious goals to delivering them on time.
he Missing Piece: Technology as an Enabler. To close the gap between ambition and reality, Indian industry must adopt next-generation sustainability technology. Platforms like Sparrow’s GroundESG are crucial, offering real-time GHG Accounting & Assurance(covering Scope 1, 2, and 3 emissions) and AI-Powered Optimization Recommendations. This level of verifiable, granular data eliminates the need for manual, spreadsheet-based reporting that causes bureaucratic delays, provides audit-ready data excellence necessary to navigate CBAM with confidence, and guides industries toward high-impact, capital-efficient decarbonization projects. Embracing such digital solutions is the only way to ensure both policy integrity and global competitiveness in this urgent climate race.
