3 min readNew DelhiUpdated: Jul 4, 2026 08:36 PM IST
The Centre has once again issued a draft notification to set greenhouse gas emission intensity (GEI) targets for the intensive iron and steel sector and to align them under India’s carbon credit trading system (CCTS).
The Ministry of Environment, Forest and Climate Change (MoEFCC) issued the draft on June 26 and made it public on July 2. It has set emission reduction targets for 255 industrial units, including the sector’s giants such as JSW Steel, Tata, SAIL (Steel Authority of India), and ArcelorMittal Nippon Steel, among others.
Draft targets for the iron and steel sector were already issued on June 23, 2025, along with aluminium (second aluminium), petroleum refinery, petrochemical and textile sectors. While final targets for other sectors were notified in January 2026, the Environment Ministry has issued a revised draft for the iron and steel sector with marginal changes to the targets, but without any explanation for the fresh draft.
The draft notification lists 2023-24 as the year for baseline product output and baseline emission intensity, and 2026-27 as the compliance-year target for individual steel plants, sponge iron units and ferro-alloy manufacturers. A 60-day window has been given to submit objections and suggestions on the draft.
The draft defined targets in terms of tonnes of carbon dioxide equivalent (tCO2e), which is used to measure the impact of all greenhouse gases and not just CO2, based on their warming potential.
The draft has set GEI targets only for 2026-27, while the 2025-26 column has been left blank.
GEI is the amount of greenhouse gases (GHG) emitted per unit of product output, such as the quantum of gases released while producing cement. The CCTS was launched in 2023 to create a framework that incentivises emission reduction through a market-based mechanism and to help achieve India’s climate action goals.
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The Centre has already finalised emission reduction targets for eight sectors – aluminium, cement, chlor-alkali, pulp and paper, secondary aluminium, petroleum refinery, petrochemical and textile.
In March this year, India revised its nationally determined contributions commitments on climate action under the United Nations Framework Convention on Climate Change and the Paris Agreement. This included a revision of the target to reduce emissions intensity of Gross Domestic Product, which was set at 47% by 2035, compared to 2005 levels.
India has committed to reduce the emissions intensity of its gross domestic product — the amount of energy used per unit of GDP — to 47% by 2030 compared to 2005 levels as part of its domestic commitments under the agreement.
The targets set in previous rounds covered 490 high-emission industrial units.
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The CCTS, which was notified in 2023, created an overarching framework for the Indian carbon market. The objective was to slash or avoid GHG emissions from sectors whose processes emit more pollutants and whose operations are hard to decarbonise.
Each obligated industry is assigned a GEI target based on emissions per unit of output. Those industries that meet or outperform their target earn carbon credit certificates, which can be sold to industries that are falling short. Industries that do not comply must pay environmental compensation, which is equal to twice the average carbon credit traded price.