India drops FY26 emission targets for refiners, textiles amid war woes | Economy & Policy News

The Bureau of Energy Efficiency (BEE), which oversees the CCTS, removed greenhouse gas (GHG) emission targets for the April 2025-March 2026 financial year for the refinery and textile sectors in a September 7 notification, after notifying such targets in a January 13 notification. The FY27 targets remain in place.

Saurabh Diddi, director of BEE, declined to comment on the latest amendment to the CCTS. In February this year, he told Business Standard in Mumbai that emission targets had been issued for around 490 units covering seven sectors through two notifications in October 2025 and January 2026.

The September amendment affects 21 units in the refinery sector, including facilities of state-run refiner Indian Oil, Reliance Industries’ Jamnagar refinery and Rosneft-run Nayara Energy’s Vadinar plant. Many of the 173 textile and fibre units are located in Gujarat, Tamil Nadu and Rajasthan.

West Asia war raises cost pressure

The war in West Asia has hurt India’s oil marketing companies because they cannot pass on an increase in crude sourcing costs to motorists and households. Any additional climate-mitigation costs would impose an extra burden, two senior industry sources said.

The export-oriented textile sector has also been affected by the war, the sources said.

Controlling industrial emissions is important because they are the fastest-growing part of the overall emissions pie, accounting for around 30 per cent of the country’s emissions, according to reports by climate experts.

India is the world’s third-largest emitter of greenhouse gases after China and the United States in absolute terms, although its per-capita emissions remain moderate.

How does the CCTS compliance mechanism work?

The GHG emission goals were part of the compliance mechanism under the CCTS, which was notified on June 28, 2023.

Under the scheme, mandatory targets were proposed for nine hard-to-abate industrial sectors, using FY24 emissions as the baseline, under the Energy Conservation Act, 2001, with an option to add more sectors along the way, according to a BEE document.

The second component of the CCTS is a voluntary, project-based baseline-and-credit mechanism for non-obligated entities.

These entities can register projects for GHG emission reduction, removal or avoidance against the baseline for the issuance of Carbon Credit Certificates (CCCs).

Iron and steel targets yet to be notified

BEE is also yet to notify targets for the iron and steel sector, the biggest industrial emitter of greenhouse gases, after inviting comments through a draft notification dated June 26, 2026.

An industry official said the steel sector had effectively also received a waiver from emission targets for FY26 because targets could not be set retrospectively.

The draft notification gave stakeholders 60 days to submit comments, a period that ended in late August.

No targets have yet been announced for fertilisers, a sector that, like refining, has been badly affected by the war.

Subsidies on fertilisers may climb to more than ₹3 trillion this fiscal year, according to analyst estimates.