This transformative step aligns with India’s commitments under the Paris Agreement, including reducing the emissions intensity of its gross domestic product by 47 per cent by 2030 and achieving net-zero by 2070, as outlined in its revised Nationally Determined Contributions (NDCs).
However, as this framework moves from policy declaration to implementation, it becomes critical to unpack what it means when GEI targets are translated into real implementable actions on the ground.
Unpacking the GEI targets
GEI, as conceptualised in the policy pronouncement, measures the greenhouse gases that a facility emits per unit of production. GEI reduction targets have been declared for nearly 490 industrial units across key carbon-intensive sectors, including aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals, textiles, and secondary aluminium. These targets are set with FY24 as the baseline and apply to FY26 and FY27 compliance years. In broad strokes, the benchmarks span the following sectors, with differential emission-reduction targets:
* Cement: A 4.7 per cent to 7.6 per cent reduction in GEI over two years, depending on the product type.
* Pulp & Paper: As much as 15 per cent reduction over the same period for some units.
* Aluminium & Chlor-alkali: Moderate, steady intensity reductions calibrated for process realities.
The heterogeneity across sectoral GEI targets is a deliberate design choice, based on the abatement potential of these industries and taking into account their underlying technical and economic constraints. Targets grounded in the abatement potential of each sector avoid a one-size-fits-all mandate and instead align decarbonisation pathways with sector-specific realities. This approach balances environmental effectiveness and economic feasibility while accounting for the unique characteristics of each sector.
Heterogeneous abatement costs
A closer scrutiny of stated GEI targets reveals two critical nuances that warrant further deliberation. First, sectors differ significantly not only in the scale of emissions but also in their underlying production processes and emission sources. For instance, aluminium smelting is largely electricity-intensive, with emissions linked to the carbon intensity of power supply; cement production involves process emissions from limestone calcination, while textiles encompass a wide range of products with varying energy and fuel use patterns.
Second, even within a sector, abatement costs vary widely across facilities due to differences in technology, fuel mix, and infrastructure and operational efficiency. For example, in sectors such as cement and chlor-alkali, incremental measures like clinker substitution, energy efficiency improvements, or waste heat recovery can deliver emission reductions at relatively moderate cost, whereas in industries such as refining and petrochemicals, emissions are tied to core chemical processes and high-temperature operations.
What makes GEI targets more effective?
To fulfil GEI commitments, firms must first build credible measurement, reporting and verification (MRV) systems that accurately track emissions, an essential but often underemphasised foundation. Reliable baselines inform meaningful targets, while transparent MRV underpins credibility in both domestic and international contexts.
Ultimately, the effectiveness of GEI will depend on how well MRV systems integrate with market functioning and price discovery. A critical challenge, however, lies in the variation of emission reduction costs across obligated entities. Differences in technology, energy access, and infrastructure mean that the cost of reducing one additional tonne of emissions varies widely across firms. If not addressed, such disparities can lead to uneven compliance burdens, where some entities face significantly higher costs than others for achieving the same target.
Where India stands and where it must go next
If implemented with nuance by combining robust MRV systems, well-functioning markets, and supportive policy instruments, GEI can become a powerful lever for India’s industrial decarbonisation drive. To translate GEI from a compliance mechanism into operational reality, policy design must:
* Gradually expand coverage to additional sectors (e.g., iron & steel) with careful calibration. A temporal strategic trajectory must be designed, keeping the practical considerations in mind.
* Develop sectoral decarbonisation pathways aligned with technology readiness and investment cycles specific to the sector.
* Strengthen carbon market institution and infrastructure, ensuring liquidity, price stability, and transparency. Robust design elements such as linking with other markets and market stability reserves are critical.
* Develop and support a just transition framework, particularly for firms with higher abatement costs, through financing, technology transfer, and capacity building.
The question ahead is not whether India can set GEI targets — it already has — but whether it can ensure that they function efficiently, fairly, and strategically across sectors.
The authors are, respectively, founder of Parijata Earth Foundation and a sustainability expert; and associate professor in the department of policy and management studies at TERI School of Advanced Studies, New Delhi
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