Climate Change

India’s Climate Challenge

India is the world’s 3rd largest GHG emitter, committed to net-zero by 2070, 45% emissions intensity reduction by 2030, and 500 GW non-fossil fuel capacity by 2030. The Carbon Credit Trading Scheme is live. EU CBAM is impacting exporters. Climate is now a board-level imperative for every Indian listed company.

2070
Net-Zero Target
45%
Intensity Cut by 2030
500 GW
Non-Fossil by 2030
CCTS
Carbon Market Live
India Context

India’s Climate Reality

India is simultaneously one of the world’s largest emitters and one of the most climate-vulnerable nations. With 1.4 billion people, a $3.5 trillion economy heavily dependent on monsoon patterns, and 7,500 km of coastline, climate change is not an abstract risk — it is an existential business challenge.

3.9B T

Annual CO2 emissions (2023), behind China and the USA. Per capita emissions still low (~2.9 tCO2/capita) but rising with industrialisation.

40%+

Share of coal in India’s primary energy mix. Energy transition is the largest decarbonisation challenge — and the largest opportunity.

676

Districts exposed to climate hazards. Heat stress, floods, cyclones, droughts, and water scarcity affect every sector of the Indian economy.

$15B+

Estimated annual climate-related losses in India. Agriculture, infrastructure, and real estate bear the largest physical risk burden.

Regulatory Landscape

India’s Climate Policy Framework

India’s climate regulatory landscape is evolving rapidly. Companies need to understand these frameworks to manage compliance risk and capture transition opportunities.

India’s NDC (Updated)

India’s updated Nationally Determined Contribution (August 2022) commits to: 45% reduction in emissions intensity of GDP by 2030 (from 2005 baseline), 50% cumulative electric power installed capacity from non-fossil fuel sources by 2030, and net-zero by 2070. These targets cascade into sectoral mandates affecting every listed company.

Carbon Credit Trading Scheme (CCTS)

India’s compliance carbon market notified under the Energy Conservation (Amendment) Act, 2022. Obligated entities in designated consumer sectors (steel, cement, aluminium, power, fertiliser, textiles, chemicals) will face emission reduction targets. MRV framework, carbon credit registry, and trading mechanisms are being operationalised.

NAPCC & 8 Missions

National Action Plan on Climate Change with 8 missions: National Solar Mission, Enhanced Energy Efficiency (PAT), Sustainable Habitat, Water, Sustaining the Himalayan Ecosystem, Green India, Sustainable Agriculture, and Strategic Knowledge for Climate Change. State Action Plans (SAPCCs) across all 28 states and 8 UTs.

PAT Scheme (BEE)

Perform, Achieve and Trade — BEE’s flagship energy efficiency scheme for designated consumers. Covers ~1,000 industrial units across 13 sectors. Energy savings certificates (ESCerts) tradeable on energy exchanges. Non-compliance penalties under the Energy Conservation Act.

Green Hydrogen Mission

≤19,744 crore National Green Hydrogen Mission targeting 5 MMT green hydrogen production capacity by 2030. Strategic focus areas: green steel, green ammonia, refining, fertiliser. PLI incentives for electrolyser manufacturing. Hydrogen purchase obligations for refineries and fertiliser plants.

RPO & REC Framework

Renewable Purchase Obligations for obligated entities (DISCOMs, open access consumers, captive users). RPO trajectory increasing to 43% by 2030 including hydropower purchase obligation (HPO). Renewable Energy Certificates (RECs) tradeable on power exchanges for compliance.

BRSR Climate Requirements

Climate Disclosure Under BRSR

BRSR Principle 6 (Environment) and BRSR Core both require climate-related disclosures. Here is what Indian listed companies must report.

BRSR Essential Indicators

  • Total energy consumption and intensity (GJ/turnover)
  • Scope 1 and Scope 2 GHG emissions (tCO2e)
  • GHG intensity per rupee of turnover
  • Share of renewable energy in total energy
  • Water withdrawal by source and consumption
  • Waste generation by category (hazardous/non-hazardous)

BRSR Leadership + BRSR Core

  • Scope 3 GHG emissions (Leadership indicator)
  • SBTi or equivalent targets (Leadership)
  • Climate risk and opportunity assessment (Leadership)
  • BRSR Core: Energy, GHG, water, waste KPIs (assurance required)
  • Year-on-year trends with base year comparisons
  • Value chain ESG data (forthcoming)

SEBI is studying ISSB (IFRS S2) adoption for India, which would add climate scenario analysis, transition plans, and physical risk disclosure requirements to the BRSR framework.

Export Risk

EU CBAM — Impact on Indian Exporters

The EU Carbon Border Adjustment Mechanism (CBAM) creates a carbon price on imports into the EU. Indian exporters in affected sectors face significant financial exposure.

Affected Indian Sectors

  • Iron & Steel — India’s largest CBAM exposure (~$5B EU exports)
  • Aluminium — High carbon intensity from coal-based smelting
  • Cement & Clinker — Process emissions + energy emissions
  • Fertilisers — Ammonia and urea production
  • Hydrogen — Grey vs green hydrogen distinction
  • Electricity — Indirect emissions in applicable sectors

CBAM Timeline

  • Oct 2023 – Dec 2025: Transitional phase — quarterly reporting of embedded emissions, no financial obligation
  • Jan 2026 onwards: Definitive phase — EU importers must purchase CBAM certificates based on embedded emissions
  • 2026–2034: Free EU ETS allocation phase-out; CBAM financial impact increases annually

How RSustain Helps

CBAM advisory is delivered by RSustain UK as part of the RSustain Group. Services include embedded emissions calculation, CBAM reporting, decarbonisation roadmap to reduce CBAM exposure, and verification coordination.

RSustain UK CBAM Advisory ↗
Climate Advisory

Climate Services from the RSustain Group

Carbon and climate consulting is delivered by specialised group entities. Contact us for India-specific enquiries and we will connect you with the right team.

Climate Intelligence

Climate Platforms & Tools

Digital platforms and tools for climate risk assessment, GHG management, and climate-related reporting.

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Related Services

Complementary Services

Frequently Asked Questions

Climate Change FAQ for Indian Companies

What is India’s Carbon Credit Trading Scheme (CCTS)?

CCTS is India’s compliance carbon market, notified under the Energy Conservation (Amendment) Act, 2022. The Bureau of Energy Efficiency (BEE) administers the scheme. Obligated entities in designated consumer sectors (currently PAT-covered sectors: steel, cement, aluminium, power, fertiliser, textiles, chemicals, and others) will receive emission intensity reduction targets. Companies that exceed targets earn carbon credits; those that fall short must purchase credits or face penalties. The scheme includes a registry, trading platform, and MRV (Measurement, Reporting, Verification) framework.

Does BRSR require GHG emissions reporting?

Yes. BRSR Essential Indicators require Scope 1 and Scope 2 GHG emissions (in tCO2e) and intensity per rupee of turnover. Scope 3 is a Leadership Indicator (voluntary but expected for large companies). BRSR Core requires third-party assurance of GHG and energy data for top 1,000 companies (phased). SEBI is also studying ISSB (IFRS S2) adoption, which would add climate scenario analysis and transition planning requirements.

How does EU CBAM affect Indian companies?

CBAM requires EU importers to purchase carbon certificates based on the embedded emissions of imported goods. Indian exporters of iron & steel, aluminium, cement, fertilisers, and hydrogen are directly affected. From January 2026, EU importers must pay for CBAM certificates at the EU ETS carbon price (currently €60–80/tCO2). The financial impact for Indian steel exporters alone is estimated at $2–4 per tonne of steel in the near term, rising as free EU ETS allocations phase out by 2034. Companies can reduce exposure by decarbonising production and documenting verified emissions.

Should Indian companies set Science Based Targets (SBTi)?

SBTi targets are not mandatory in India but are increasingly expected by institutional investors, ESG rating agencies (CDP, MSCI), and global customers. Over 100 Indian companies have committed to or set SBTi targets. SBTi alignment strengthens BRSR Leadership disclosures, improves CDP scores, and demonstrates credible net-zero commitment. For companies not ready for SBTi, intensity-based emission reduction targets aligned with India’s NDC are a credible intermediate step.

Who provides climate advisory at RSustain?

Carbon management and climate advisory services are delivered by specialised RSustain Group entities: RSustain Carbon (rsustain.org) handles GHG inventories, net-zero planning, CCTS, carbon credits, and climate risk. RSustain UK (rsustain.co.uk) handles EU CBAM advisory. RSustain India provides India-specific tools (ScopeTracer, ClimateAdapt, CBAM calculators) and integrates climate data into BRSR reporting. Contact our India office and we will connect you with the right team.

Need Climate Advisory for Your Indian Operations?

Contact us and we will connect you with the right RSustain Group team for carbon management, net-zero planning, CCTS compliance, or CBAM advisory.

Contact India Office → Visit RSustain Carbon ↗

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