Environment Ministry proposes targets to curb emissions in iron and steel sector

The Environment Ministry has issued a draft notification to set legally binding emission reduction targets for the iron and steel sector under the Greenhouse Gases Emission Intensity (GEI) Target (Amendment) Rules, 2025.

The draft notification published on Thursday sets targets for 255 iron and steel units. These include Tata Steel in Jharkhand, JSW Steel in Karnataka, and Jindal Steel and Power in Chhattisgarh.

With the draft notification, the total number of carbon-intensive industries required to comply with the framework has risen to nine, the other eight being aluminium, secondary aluminium (made from recycled scrap), petroleum refinery, petrochemical, textile industries, cement, chlor-alkali, and pulp and paper.

All these sectors are under the purview of the country’s domestic carbon market as part of the Carbon Credits Trading Scheme (CCTS) launched in 2023.

The scheme incentivises reductions in carbon dioxide emissions and supports the country’s climate action commitments under the 2015 Paris Climate Agreement. If industries achieve the legally binding targets, they earn carbon credits, which can be sold to industries that fail to meet the targets.

However, failing to comply with or contravening the provisions of the GEI Target (Amendment) Rules will result in the payment of environmental compensation equal to twice the amount of the average carbon credit in the evaluation year.

For the iron and steel sector, the evaluation year is 2026-2027, and emissions intensity for 2023-24 is the baseline.