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Last Updated on: 1st September 2025, 11:23 am
This article was curated together with Carbon Removal India Alliance (CRIA) — India’s only durable carbon removal (CDR)-focused industry coalition.
India’s climate policy landscape is undergoing a pivotal transformation. Recent developments signal a shift from ambition to action, with foundational frameworks now taking shape across emissions management, carbon markets, international cooperation, and climate finance.
1. Mandatory Emission Intensity Targets For High-Emission Industries
The Government of India has issued draft rules under the Carbon Credit Trading Scheme (CCTS), 2023, introducing mandatory Greenhouse Gas Emission Intensity (GEI) targets for five hard-to-abate sectors: Aluminum, Iron & Steel, Petroleum Refineries, Petrochemicals, and Textiles. Entities that outperform their targets can earn tradable carbon credits, while those that underperform must purchase credits or face penalties.
This is a critical step toward operationalizing India’s carbon market and providing clarity to industry. The draft notification is open for public comments for 60 days from its publication.
2. India–Japan Joint Credit Mechanism (JCM): A Bilateral Boost For Decarbonization
India and Japan are reportedly finalizing a Joint Credit Mechanism (JCM) under Article 6.2 of the Paris Agreement, enabling Japanese firms to invest in and deploy carbon-reduction technologies in India to receive emission reduction credits. Target sectors include solar energy, green hydrogen, and sustainable aviation fuel (SAF).
This partnership offers India a strategic opportunity to channel international finance into underdeveloped clean energy sectors (potentially including CDR) and leverage Japanese technical expertise. Read more on the India–Japan JCM here.
3. Climate Finance Taxonomy: A New Framework For Capital Allocation
India’s Department of Economic Affairs, Ministry of Finance has released a Draft Climate Finance Taxonomy, a landmark step toward aligning financial flows with climate goals. The taxonomy aims to guide investments into mitigation, adaptation, and transition activities.
4. The State of Punjab Begins Journey Towards Using Biochar Carbon Removal To Abate Air Pollution
The Carbon Removal India Alliance (CRIA) and GDi Partners, with support from the Punjab Development Commission, Open Philanthropy, and the Nand & Jeet Khemka Foundation, co-organized a pivotal convening in April on “Biochar for Crop Residue Management & Climate Resilience” in Punjab. The event featured a Biochar Developers Showcase and panel discussions on policy, scaling, and finance, fostering connections and collaborative pathways for large scale biochar adoption in Punjab. Please find the key takeaways from the discussion here.
Looking Ahead
These policy shifts mark a directional progress for India’s climate strategy. By embedding emissions intensity targets, enabling international credit mechanisms, laying the groundwork for climate-aligned finance, and climate resilient agricultural supply chains, India is creating the enabling environment needed for CDR to scale responsibly and equitably.
The Carbon Removal India Alliance (CRIA) remains committed to supporting this transition by fostering research, field validation, and pilot projects that advance the carbon removal ecosystem in India.
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