The Centre has brought the textiles sector within the scope of mandatory greenhouse gas (GHG) emission intensity reduction targets as part of its efforts to meet climate goals for 2026–27, using 2023–24 as the baseline year.
Under new rules notified by the Ministry of Environment, Forest and Climate Change, industrial textile units across the country will be required to reduce GHG emissions per unit of output, known as emission intensity, starting from the 2025–26 financial year. Non-compliant units will be subject to financial penalties.
The regulations, formally titled the Greenhouse Gases Emission Intensity Target (Amendment) Rules, have been issued under the compliance mechanism of the Carbon Credit Trading Scheme (CCTS), 2023. Unlike absolute emission caps, the framework mandates reductions in emissions intensity, an approach intended to encourage efficiency improvements even as production volumes increase.
A baseline year of 2023–24 will be used to assess progress against sector-specific targets. Among the notified entities are 173 textile units operating across sub-sectors including spinning, processing, fibre production, and composites.
The Greenhouse Gases Emission Intensity (GEI) targets for 2025–26, measured in tonnes of carbon dioxide equivalent, have been calculated on a pro-rata basis for the remaining months of the current financial year. Cumulative emission intensity reductions of between 3% – 7% are targeted by 2026–27 compared with 2023–24 levels.
Industrial units that fail to meet their GEI targets, or do not submit carbon credit certificates equivalent to the shortfall, will be liable to pay environmental compensation imposed by the Central Pollution Control Board (CPCB). The penalty will be set at twice the average price at which carbon credit certificates are traded during the relevant compliance year and must be paid within 90 days of the imposition order.
The GEI framework is aligned with India’s long-term objective of achieving net-zero emissions by 2070 and is expected to contribute to the country’s Nationally Determined Contribution (NDC) by supporting the reduction, removal, or avoidance of greenhouse gas emissions.
While the inclusion of the textiles sector and other industries may increase compliance costs, particularly for smaller enterprises, it is also expected to incentivise investment in cleaner technologies and more efficient production processes. At the same time, the Carbon Credit Trading Scheme offers potential upside for companies that exceed reduction targets, enabling them to generate and trade carbon credits within the market.
