Ministry of Environment, Forest, And Climate Change Expands GHG Emission Intensity Targets To Refineries, Petrochemicals, And Textiles Under 2025 Amendment

In a major policy move to strengthen India’s climate action framework, the Ministry of Environment, Forest and Climate Change has officially notified the Greenhouse Gas Emission Intensity Target (Amendment) Rules, 2025. The notification, issued on January 13, 2026, expands the scope of India’s Carbon Credit Trading Scheme, 2023, by bringing more energy-intensive industries under mandatory emission reduction targets. The amendment signals the government’s intent to deepen industrial participation in emissions control while laying the foundation for a functional domestic carbon market.

The latest rules build on earlier regulations that had already covered the aluminium, cement, chlor-alkali, and pulp and paper sectors. With this amendment, four additional high-impact sectors—secondary aluminium, petroleum refineries, petrochemicals, and textiles—have been included. These sectors account for a significant share of India’s industrial emissions, and their inclusion is expected to push companies toward cleaner processes, improved energy efficiency, and lower carbon intensity in production.

A key element of the amendment is the introduction of a new “Second Schedule,” which clearly defines emission intensity targets for “Obligated Entities.” These targets are calculated using 2023–24 as the baseline year and are expressed as metric tonnes of carbon dioxide equivalent emitted per unit of output. The approach ensures that reductions are linked to production efficiency rather than absolute output, allowing industries to grow while still lowering their environmental impact.

For petroleum refineries, the rules introduce a Normalized Refinery Generation Factor, or NRGF. This factor adjusts emission targets based on the complexity and configuration of individual refineries, ensuring that comparisons are fair and technically balanced. This method recognizes that refineries vary widely in scale and process intensity, and therefore need differentiated benchmarks.

The compliance period has been divided into two immediate phases. The first target applies to the 2025–26 period and is calculated on a pro-rata basis, covering the months from January to March 2026. The second target applies to 2026–27 and carries forward the same percentage reduction requirement, building on the progress achieved in the initial phase. This phased approach is intended to give industries time to adjust while still maintaining momentum toward long-term emission reductions.

Several major industrial players have been identified as obligated entities under the new framework. In the refinery sector, facilities operated by companies such as Bharat Petroleum Corporation Limited, Indian Oil Corporation, and Reliance Industries are included. In the textile sector, firms like Madura Coats and Vardhman Yarns are now required to meet defined emission intensity targets for their spinning and processing units.

The government expects these measures to support the development of a strong domestic carbon credit market. Companies that outperform their targets will be able to earn carbon credits and trade them, while those that fall short may need to buy credits or face penalties. Through this market-based system, the amendment aims to encourage innovation, reward efficiency, and move India steadily closer to its long-term goal of achieving net-zero emissions.