India’s carbon trading plan for steel industry slows as emissions data gaps force reset

emissions data from about 70 plants to establish this baseline. But a review found mismatches between reported emissions and fuel use or production levels at some units, while others used differing calculation methods.

In some cases, steel companies also raised concerns over how emission levels were determined.Since emission limits and credit allocations depend on this baseline, the steel ministry has begun rechecking plant-level data. The revised study is under way.“We are going to start the carbon credit trading system very soon.

Till the baseline survey is completed, we will issue broader interim guidelines for the sector, and gradually move to revised emission reduction targets,” one of the two steel ministry officials cited earlier said, requesting anonymity.India’s Carbon Credit Trading Scheme, introduced under the Energy Conservation (Amendment) Act, 2022, is designed to create a domestic market where companies emitting less than their permitted limit earn credits that can be sold to those exceeding their caps. A carbon credit typically represents one tonne of carbon dioxide emissions.The push to operationalize a domestic carbon market is also linked to the European Union’s Carbon Border Adjustment Mechanism, which became fully operational in 2026 and requires importers of carbon-intensive goods such as steel to pay a levy based on embedded emissions.Indian policymakers want a domestic carbon accounting and trading framework in place before entering negotiations with the European Union so that exporters are not exposed to overlapping compliance costs.“The idea is to avoid paying twice for the same emissions,” the second official cited earlier said.Until the revised baseline is completed and verified, interim