India is planning to set carbon emission reduction targets for four sectors that are dependent on fossil fuels. These sectors are that of petrochemicals, iron and steel, cement, and pulp and paper, news agency Reuters reported. The sectors aim to maintain these targets for three years. This is part of India's efforts to meet its greenhouse gas emissions reduction targets, a Reuters report said, citing two government officials.
The companies that plan to reduce carbon emissions for three years are ACC, an Indian cement producer; Adani Energy Solutions; Adani Enterprises; Ambuja Cements; and the Indian Oil Corporation. Not only will these companies try to meet certain emissions reduction targets, but will also be the first to start carbon trading in India.
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Carbon trading is a practice that levies a carbon tax on emissions with the aim to curb the release of greenhouse gases into the environment. Companies that emit less can sell their carbon credits to firms that emit more greenhouse gases.
These sectors intend to start carbon trading in April 2025.
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Quoting one of the government officials, the Reuters report said that the mandates for carbon emission reductions will be applicable from 2024-2025, and that carbon trade will begin in 2025-2026.
India has submitted its emission intensity reduction goals to the United Nations, and based on these, the targets will be aligned. Emission intensity refers to the total amount of greenhouse gas emissions emitted for every unit increase of gross domestic product (GDP), the report said.
India has pledged to reduce its ratio of greenhouse gas emissions to GDP by 2030 to 45 per cent of its 2005 level. India also aims to achieve net zero by 2070.
The Indian Parliament cleared the Energy Conservation Amendment Bill last year. This includes provisions for putting in place a carbon market. A carbon credit sold outside the country cannot be used for meeting the Nationally Determined Contributions (NDCs) of the originating country, according to the framework set by the Bill.
Carbon pricing can help the world achieve carbon neutrality by 2050. By assigning a cost to each tonne of emitted carbon dioxide, carbon pricing incentivises businesses and encourages them to adopt greener alternatives.