The grid’s carbon intensity determines every industrial Scope 2 footprint.
Coal generation fell 3% in 2025 — the first structural decline since 1973. RE generation rose 22% to 270 BU. Non-fossil installed capacity has crossed 52.57%, five years ahead of the 2030 target. But the Grid Emission Factor (0.710 tCO₂/MWh, CEA V21.0 December 2025) still makes every industrial Scope 2 calculation material. We track RECs, CCC trading, CERC regulations, and the RE transition continuously.
The carbon intensity of India’s electricity grid determines the Scope 2 emissions of every industrial consumer in the country. The power sector is not just one sector among five — it is the foundation that every other sector’s decarbonisation sits on. A steel plant’s EAF electricity, an aluminium smelter’s pot-line power, a fertiliser plant’s utility steam, a freight corridor’s traction electricity — all of it passes through a grid whose emission factor is tracked by CEA, published quarterly, and used in CCTS Scope 2 GEI calculations by every obligated entity. At 0.710 tCO₂/MWh (CEA V21.0, December 2025), India’s grid emission factor is falling — but the rate of its decline determines how quickly the rest of the industrial economy can decarbonise by switching to electricity.
India has already exceeded 52.57 percent non-fossil installed capacity as of February 2026 — crossing its earlier 2030 NDC target five years ahead of schedule. Coal generation fell 3 percent in 2025, the first structural decline since 1973. RE generation rose 22 percent to 270 billion units. These are not incremental improvements; they are structural inflections that change the economic case for electrification across every sector simultaneously. At the same time, India is building a domestic carbon market from scratch. The Carbon Credit Trading Scheme, with 740 obligated entities across nine sectors and first compliance-based trades expected by October 2026, is creating compliance obligations and CCC trading opportunities simultaneously — and the price at which CCCs trade on IEX and PXIL is the single most consequential number in the industrial decarbonisation economy right now.
See the Industrial Decarbonisation Policy Map for a full view of how the power sector and carbon market connect to all five covered sectors. For India’s NDC targets — including the 500 GW non-fossil capacity goal and the net-zero 2070 commitment — see the India Decarbonisation page.
Live market reference values — updated every Sunday on the Market Pulse strip:
The power sector and carbon market are interconnected and both are changing rapidly. These are the dynamics that matter most for industrial stakeholders.
Industrial tariffs, open access and renewable procurement
The Green Energy Open Access Rules 2022 and the ISTS waiver have materially improved industrial consumers’ ability to procure renewable electricity directly from generators. The economics of open access procurement vary significantly by state — cross-subsidy surcharges, wheeling charges, and banking policies differ across State Electricity Regulatory Commissions. The CERC First Amendment of March 2026 introduced a 4× multiplier for offshore wind RECs, a 3× multiplier for pumped hydro RECs, and the VPPA framework under Regulation 14A.
Electricity Market repository →CCTS, CCC trading on IEX and PXIL, and the GEF trajectory
The Carbon Credit Trading Scheme is operational in framework, with 490 entities holding active GEI targets across seven sectors as of April 2026. CCCs trade on IEX, PXIL, and HPX under CERC oversight at Rs 1,740/tCO₂e. The penalty for non-compliance is twice the average CCC price. The Grid Emission Factor — currently 0.710 tCO₂/MWh (CEA V21.0, December 2025) — determines the Scope 2 component of every industrial entity’s CCTS GEI. As RE penetration rises and the GEF falls, Scope 2 GEI falls automatically for any entity drawing from the grid.
Carbon Markets repository →RPO trajectory, RCO and the Energy Storage Obligation
Distribution companies and large open-access consumers face Renewable Purchase Obligations increasing each year toward 43.33% by 2029-30. The Renewable Consumption Obligation extends mandatory renewable consumption directly to large industrial Designated Consumers. The Energy Storage Obligation adds a parallel requirement to procure storage capacity alongside renewable power. RECs satisfy RCO obligations but — crucially — do not reduce CBAM embedded emissions. This distinction matters enormously for industrial companies trying to optimise across both compliance frameworks simultaneously.
Renewable Obligations repository →Emission standards, fly ash and EIA for new capacity
Thermal power plants face stack emission standards for particulate matter, sulphur dioxide, and nitrogen oxides under the Air Act, with CPCB periodically tightening limits. The Fly Ash Utilisation Notification creates obligations linking power plants to cement and construction users within a specified radius. New power capacity — including renewable projects above threshold sizes — requires environmental clearance under the EIA Notification from MoEFCC. The emissions standards compliance timeline intersects directly with plants’ economic decisions about early retirement versus upgrade.
Environmental Regulations repository →The power transition is the enabling condition — every other sector’s decarbonisation depends on it
Scale + Access
Carbon Market
Grid + H₂
Power sector decarbonisation is the foundation for every other sector’s transition — follow the links to see how it connects to each one.