India’s Carbon Market Expands: 4 Major Sectors Now Under Mandatory Compliance (CCTS Amendment 2025)

C² Team
Jan 19
3 min read

The era of "voluntary" sustainability for India’s manufacturing core is officially over. The Ministry of Environment, Forests & Climate Change (MoEFCC) has notified the Greenhouse Gases Emission Intensity Target (Amendment) Rules, 2025, fundamentally rewriting the compliance playbook for Indian industry.

This is not a drill. As of January 2026, the Carbon Credit Trading Scheme (CCTS) has expanded its dragnet to include 200+ new industrial units across four massive sectors. At Csquare (C²), we have analyzed the gazette notification to break down exactly what this means for your balance sheet.

🏛️ The "Big 4" Expansion: Who is Now an "Obligated Entity"?

Previously restricted to heavy industries like Cement and Steel, the amendment now legally binds the following sectors to specific Greenhouse Gas (GHG) Emission Intensity targets.

1. Textile (The Largest Inclusion)

This is the most significant expansion, covering nearly 173 units across the entire value chain. If your facility falls into these categories, you are now on the clock:

Spinning: Including major names like L.S. MILLS LIMITED and Madura Coats Private Ltd.
Processing: Including BSL LTD., Sona Selection, and Banswara Syntex Ltd.
Fibre (Synthetics): Manufacturers like DNH Spinners Pvt Ltd and Jiwarajka Textile Industries.
Composite Mills: Integrated giants such as Maharaja Shree Umaid Mills Ltd. and LOYAL TEXTILE MILLS LTD.

Csquare (C²) Insight: The textile sector typically operates on thin margins. A carbon penalty could wipe out net profits for the quarter. Csquare (C²) is already working with textile majors to audit their specific energy consumption (SEC) against these new norms.

2. Petroleum Refinery

The heavyweights of India’s energy infrastructure are now legally mandated to decapitalize.

Obligated Entities: Bharat Petroleum Corporation Limited (BPCL), Indian Oil Corporation Limited (IOCL), Chennai Petroleum Corp. Ltd, Mangalore Refinery & Petrochemicals LTD, and Reliance Industries Limited (RIL).

3. Petrochemicals

This covers critical upstream facilities, specifically Gas and Naphtha Crackers.

Obligated Entities: Brahmaputra Cracker and Polymer Limited, GAIL (India) Limited, HPCL-Mittal Energy Limited, Haldia Petrochemicals Ltd, and OPaL India.

4. Aluminium (Secondary)

While primary aluminium was already covered, the recycling sector is now included.

Obligated Entities: Units like Hindalco Industries Limited’s recycling facilities.

⚠️ The "Pro-Rata" Trap: You Are Already liable (Jan–Mar 2026)

This is the most critical detail buried in the notification. The government has

NOT given a grace period for the next financial year.

Compliance Period 1: 2025-26.
Immediate Action: The targets apply on a pro-rata basis for the remaining months of this fiscal year (January 1, 2026 – March 31, 2026).

What Csquare (C²) wants you to know:

If your factory emits more than its assigned intensity target right now, you will end the financial year in a deficit. You will be legally required to purchase Carbon Credit Certificates (CCCs) to cover that gap.

📉 The Compliance Math: How It Works

The Bureau of Energy Efficiency (BEE) has standardized the metric. Your performance is no longer about total absolute emissions, but Emission Intensity.

Baseline: Your targets are calculated based on your verified emission data from 2023-24.
The Trajectory: You have a specific reduction target for 2025-26 and a steeper target for 2026-27.
The Trading Mechanism:
- Beat the Target? You earn CCCs. Csquare (C²) can help you trade these on power exchanges for immediate revenue.
- Miss the Target? You must buy CCCs.
- Penalty for Non-Compliance: If you fail to surrender credits, you face a penalty of 2X the weighted average price of carbon credits.