Environment & Ecology★ Must Know

Centre proposes mandatory carbon emission targets for iron and steel plants

By TestNeeti Editorial TeamPublished Monday, 6 July 2026 2 min readSource: CA - ClimateArticle 4 of 26

The Central Government, through the Ministry of Environment, Forest and Climate Change (MoEFCC), has proposed to bring the iron and steel sector under mandatory greenhouse gas (GHG) emission intensity targets, expanding India's compliance-based carbon market under the Carbon Credit Trading Scheme (CCTS), 2023. The draft notification, published on 26 June 2026, amends the Greenhouse Gases Emission Intensity Target Rules, 2025, introducing a new Third Schedule with plant-wise targets for over 200 iron and steel units for compliance years 2025-26 and 2026-27. Issued under Sections 3, 6 and 25 of the Environment (Protection) Act, 1986, it invites objections within 60 days. Targets are measured in tonnes of CO₂ equivalent per tonne of product, with outperformers earning carbon credit certificates and laggards required to buy credits.

Key Facts & Details

9 points

1
The MoEFCC has proposed mandatory GHG emission intensity targets for more than 200 iron and steel manufacturing units under the Carbon Credit Trading Scheme (CCTS), 2023.
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The draft notification, published on 26 June 2026, amends the Greenhouse Gases Emission Intensity Target Rules, 2025, adding a new Third Schedule.
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Targets cover the compliance years 2025-26 and 2026-27, with baseline emission intensity values assigned for 2023-24.
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The amendment is issued under Sections 3, 6 and 25 of the Environment (Protection) Act, 1986, with a 60-day window for stakeholder objections.
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Emission intensity targets are expressed as tonnes of carbon dioxide equivalent (tCO₂e) per tonne of equivalent product.
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Major producers covered include ArcelorMittal Nippon Steel India, Tata Steel, JSW Steel, SAIL, RINL, Jindal Steel & Power, Shyam Metalics and Godawari Power & Ispat.

Deep Dive

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Under the CCTS, emission intensity targets had already been notified for eight sectors, including aluminium, cement, chlor-alkali, pulp and paper, petroleum refinery, petrochemicals and textiles; iron and steel is the latest addition.
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Companies that outperform targets can generate carbon credit certificates, while those that fall short may have to purchase carbon credits under the compliance mechanism.
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The proposal targets a hard-to-abate industrial sector and spans producers across states such as Odisha, Chhattisgarh, Karnataka, Jharkhand, West Bengal, Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Telangana.

Exam Focus

Examiners may ask which law the amendment is issued under, which scheme it builds on, and how emission intensity targets are measured.

Exam Relevance & Angle

Bringing the energy-intensive iron and steel sector into India's compliance carbon market is a major step in industrial decarbonisation, encouraging investment in cleaner technologies and supporting India's long-term climate commitments while strengthening the Carbon Credit Trading Scheme framework.

Target Exams

SBI POIBPS PORBI Grade BNABARD Grade ASSC CGLUPSC CSEState PCS

Background & Context

The Carbon Credit Trading Scheme (CCTS), 2023 provides the framework for India's domestic compliance carbon market, where obligated industries receive emission intensity targets and can trade carbon credit certificates based on performance. It operates under the Environment (Protection) Act, 1986, the umbrella law empowering the Centre to protect and improve environmental quality. Emission intensity measures emissions per unit of output, allowing efficiency-based targets rather than absolute caps. Such market-based mechanisms aim to decarbonise industry cost-effectively by rewarding cleaner producers and penalising high emitters, complementing India's net-zero and climate goals.