What happens if a company does not meet its Greenhous Gas Emission Intensity (GEI) Targets?

If an obligated entity fails to meet its assigned Greenhouse Gas Emission Intensity (GEI) targets, it must address the shortfall through the following mandatory steps within the Indian Carbon Market (ICM) framework:

1. Purchase and Surrender of Certificates: The entity is required to purchase and surrender a number of Carbon Credit Certificates (CCCs) equivalent to its emission shortfall. This process ensures that even when individual targets are missed, the system-level emission reduction goals are upheld through market-based offsets.
2. Financial Penalties: Under the Greenhouse Gases Emission Intensity Target Rules 2025, non-compliance carries significant financial consequences. The entity must pay a penalty equivalent to twice the market price of the unmet carbon credits.

By making the purchase of credits more economical than paying the penalty, the ICM incentivizes industries to prioritize energy efficient technologies and operational improvements.