The government has expanded the compliance coverage under the Indian Carbon Market (ICM) by notifying Greenhouse Gas Emission Intensity (GEI) targets for 208 additional carbon-intensive industries. The move brings Petroleum Refineries, Petrochemicals, Textiles and Secondary Aluminium sectors under the Carbon Credit Trading Scheme (CCTS), according to an official notification issued on January 13.
With the latest inclusion, a total of 490 obligated entities across some of India’s most emission-intensive sectors are now required to meet specified emission intensity reduction targets. The first batch of GEI targets was notified in October 2025 for the Aluminium, Cement, Chlor-Alkali and Pulp & Paper sectors, covering 282 entities.
Notified in 2023, the CCTS provides the operational framework for the Indian Carbon Market with the objective of reducing or avoiding greenhouse gas emissions by placing a cost on carbon through a tradable credit system.
The CCTS functions through a Compliance Mechanism and an Offset Mechanism. Under the compliance segment, designated industries must adhere to assigned GEI targets. Those that achieve higher-than-required reductions can earn tradable Carbon Credit Certificates, which may be sold to entities unable to meet their obligations.
Ministry of Environment, Forest and Climate Change said the expansion of sectoral coverage marks an important step in operationalising the Indian Carbon Market, adding that years of technical groundwork, industry consultation and institutional coordination have helped advance the mechanism.
As the compliance market matures, the government expects the ICM to become a key instrument in steering industrial growth toward India’s long-term climate goals and its net-zero commitments.
