The Government of India has expanded the scope of its climate compliance framework by notifying Greenhouse Gas Emission Intensity (GEI) targets for 208 additional carbon-intensive industrial entities under the Carbon Credit Trading Scheme (CCTS). The notification, issued on January 13, 2026, brings Petroleum Refineries, Petrochemicals, Textiles and Secondary Aluminium sectors under the compliance mechanism of the Indian Carbon Market (ICM).

With this latest inclusion, the total number of obligated entities covered under the ICM’s compliance mechanism has increased to 490, significantly broadening its reach across India’s most emission-intensive industries. Earlier, in October 2025, the government had notified GEI targets for 282 obligated entities from the Aluminium, Cement, Chlor-Alkali, and Pulp & Paper sectors.

The CCTS, notified by the Government of India in 2023, provides the overarching framework for the operationalisation of the Indian Carbon Market. Its primary objective is to reduce or avoid greenhouse gas emissions across key sectors of the Indian economy by assigning a price to emissions through a carbon credit certificate trading system.

The scheme functions through two mechanisms — the Compliance Mechanism and the Offset Mechanism. Under the Compliance Mechanism, designated emission-intensive industries, referred to as Obligated Entities, are required to meet prescribed GEI reduction targets. Entities that achieve reductions beyond their assigned targets are eligible to earn Carbon Credit Certificates, which can be traded with other obligated entities that fall short of compliance.

The latest expansion reflects sustained engagement with industry stakeholders, detailed technical evaluations, and coordinated institutional efforts. As sectoral coverage widens and the compliance framework continues to mature, the Indian Carbon Market is expected to play a pivotal role in balancing industrial growth with India’s long-term climate commitments and its journey toward a net-zero emissions pathway.