CCTS GEI Targets for Indian Steel Plants
The June 23, 2025 MoEFCC gazette notification (G.S.R. 405E) assigned legally binding GHG emission intensity targets to 253 Indian steel plants for FY2025-26 and FY2026-27, using FY2023-24 as the baseline year. The notification covers the full breadth of India’s steel production landscape — from the 12-million-tonne integrated plants of AMNP, Tata Steel, JSW, SAIL, and RINL at the top, through 113 medium-sized DRI-induction furnace and EAF units, to 114 small sponge iron producers at the bottom. Together these 253 units produced approximately 145 million tonnes of steel in FY2023-24, covering more than 97 percent of India’s total output.
Every plant in this notification now has two financial obligations running simultaneously. First, it must achieve its gazette-notified GEI target for FY2025-26 — the compliance year that is currently active — or purchase Carbon Credit Certificates on IEX or PXIL to cover the shortfall at Rs 1,740/tCO₂e, or face Environmental Compensation at twice that rate imposed by CPCB. Second, it must submit verified FY2025-26 GHG data through the ICM Portal by approximately June-July 2026 via an Accredited Carbon Verification Agency — a deadline now approximately eight weeks away.
This article maps the gazette data across the three plant size categories, identifies the structural CCC buyers and sellers, calculates the financial exposure at current CCC prices, and explains why the LSE Grantham Institute’s August 2025 analysis — which found the Phase 1 targets insufficient for deep decarbonisation — actually strengthens the case for early voluntary overperformance as a value-creation strategy.
What the gazette notified — and what it did not
8 October 2025: Final GEI Target Rules notified in the Official Gazette — legally binding for FY2025-26 and FY2026-27. FY2023-24 is the baseline year. 253 steel units covered with plant-specific GEI schedules.
21 March 2026: ICM Portal formally launched. All obligated entities must register, submit monitoring plans, and file annual verified reports through this single portal.
June–July 2026: ACVA Form A deadline — FY2025-26 verified GHG emission intensity data. Failure to submit triggers Environmental Compensation from CPCB independent of compliance position.
Penalty structure: Environmental Compensation = 2× average CCC price per tCO₂e shortfall, payable within 90 days of imposition by CPCB under Section 15 of the Environment Protection Act, 1986.
One critical point that the gazette notification did not include: production technology. The 253-plant dataset lists unit name, address, FY2023-24 production volume, FY2023-24 baseline GEI, and the FY2025-26 and FY2026-27 GEI targets. It does not state whether each unit is BF-BOF, DRI-induction furnace, EAF, or a combination. This is analytically significant — technology type must be inferred from GEI profile, which the LSE Grantham Institute analysis did using a threshold of 1.0 tCO₂/ts for large plants (below this threshold implies EAF or processed steel) and 1.25 tCO₂/ts for medium plants. This approach is reasonable but imperfect, and Reclimatize.in uses the same methodology with that caveat stated.
The AMNP-to-JSW tier: where CBAM and CCTS exposure is highest and the CCC stakes are largest
The 26 large units — defined as those producing above 1 million tonnes of steel in FY2023-24 — represent seven corporate groups: Arcelor Mittal Nippon Steel (AMNP), Jindal (JSPL), JSW, RINL, SAIL, Shyam Metalics, and Tata Steel. These 26 units account for the bulk of India’s export-grade steel output and therefore carry the highest combined CBAM and CCTS financial exposure of any plant category.
Within the large plant universe, the gazette data reveals a clear bimodal distribution. A high-emissions cluster — comprising BF-BOF integrated mills — sits with baseline GEI values predominantly between 2.3 and 3.6 tCO₂/ts. A low-emissions cluster — comprising EAF, stainless steel, and processed steel units — sits at 0.14 to 0.28 tCO₂/ts. The mean of the high-emissions cluster is 2.89 tCO₂/ts in the baseline year, declining toward targets of 2.83 tCO₂/ts in FY2025-26 and 2.73 tCO₂/ts in FY2026-27 — an annual reduction averaging approximately 2 percent, or roughly 0.06 tCO₂/ts per year.
| Plant / Corporate Group | Location | FY2023-24 Output (approx.) | Baseline GEI (tCO₂/ts) | FY2025-26 Target | FY2026-27 Target | CCTS Position |
|---|---|---|---|---|---|---|
| AMNP Hazira (Arcelor Mittal Nippon Steel) | Surat, Gujarat | ~9 MT | 2.27 | ~2.22 | ~2.17 | Best-in-class BF — potential seller. DRI-EAF-Conarc hybrid mix lowers intensity vs pure BF-BOF |
| Tata Steel Jamshedpur | Jharkhand | ~10 MT | 2.38 | ~2.33 | ~2.27 | Marginal — near sector-leading BF efficiency; meets target with operational discipline |
| Tata Steel BSL (Kalinganagar) | Odisha | ~5 MT | ~2.45 | ~2.39 | ~2.31 | Marginal — newer plant with some efficiency advantage; open access RE opportunity |
| Tata Steel BSL (formerly Bhushan Steel — EAF unit) | Odisha | ~4 MT | 0.15 | 0.15 | 0.14 | Structural CCC seller — scrap EAF, 18× below BF-BOF median. Large surplus at any BF-BOF buyer price |
| JSW Steel Vijayanagar | Karnataka | ~12 MT (largest single unit) | ~2.65 | ~2.59 | ~2.51 | Buyer pressure — high output volume amplifies CCC cost. 0.14 tCO₂/ts above target = Rs 29 Cr CCC cost at Rs 1,740 |
| JSW Ispat Special Products (Mandir Hasaud) | Chhattisgarh | ~3 MT | ~3.2 (pre-acquisition baseline) | ~2.88 | ~2.56 | 20% GEI reduction target to FY2026-27 — the steepest trajectory in the large plant universe; under post-acquisition JSW integration programme |
| SAIL Bhilai Steel Plant | Chhattisgarh | ~7 MT | ~2.80 | ~2.74 | ~2.66 | Structural buyer — older BF fleet, low energy integration investment historically. PAT compliance track record mixed |
| SAIL Rourkela Steel Plant | Odisha | ~4.5 MT | ~2.75 | ~2.69 | ~2.61 | Structural buyer — modernisation underway but BF fleet ageing; Odisha open access RE opportunity partially offsets Scope 2 |
| SAIL Durgapur Steel Plant | West Bengal | ~2 MT | ~2.90 | ~2.83 | ~2.74 | Structural buyer — one of SAIL’s older plants; reline decision imminent for some units |
| RINL (Rashtriya Ispat Nigam) Vizag | Andhra Pradesh | ~7 MT | ~2.70 | ~2.64 | ~2.57 | Structural buyer — PSU with limited capital for decarbonisation investment; coastal location provides DFC and port logistics advantage |
| JSPL Angul | Odisha | ~6 MT | ~2.50 | ~2.44 | ~2.37 | Marginal — gas DRI-EAF mix reduces average GEI; Odisha open access RE creates Scope 2 lever |
The most analytically significant data point in the large plant universe is the Tata Steel BSL EAF unit’s baseline GEI of 0.15 tCO₂/ts against a sector mean of 2.89 tCO₂/ts. At Tata Steel BSL’s EAF output of approximately 4 million tonnes per year, the annual CCC surplus relative to the high-emissions cluster benchmark is approximately 11 million tCO₂e. At Rs 1,740/tCO₂e, that is theoretically Rs 19,140 crore per year in CCC value — but the practical surplus is relative to the target, not to the sector mean. Against the EAF unit’s own target of 0.15 tCO₂/ts, the surplus is marginal. The value accrues from the structural buyer-seller dynamic: BF-BOF plants buying CCCs must purchase from somewhere, and EAF plants with persistent outperformance are the natural counterparty.
The DRI-induction furnace tier: the most heterogeneous and analytically challenging segment
The 113 medium-sized units — producing between 100,000 and 1 million tonnes in FY2023-24 — are the most technologically diverse segment of the gazette data. They include DRI-induction furnace combinations, EAF units, speciality steel producers, and hybrid process combinations. The LSE Grantham analysis identifies two clusters within this tier using a 1.25 tCO₂/ts threshold.
Above-threshold medium plants — likely DRI-IF/EAF combinations — have a baseline GEI mean of 2.66 tCO₂/ts, with targets of 2.61 in FY2025-26 and 2.51 in FY2026-27. This implies an average 4 percent reduction over the two-year window, steeper than the 2 percent required of large BF-BOF plants. Below-threshold medium plants — likely scrap EAFs and speciality producers — have GEI values below 1.25 tCO₂/ts and face only marginal absolute reduction requirements.
Gas-based DRI-EAF combinations: Plants in Gujarat and Rajasthan using natural gas-based DRI — the Midrex/HYL process — have baseline GEIs of approximately 1.8 to 2.5 tCO₂/ts. These plants are partially exposed to the LNG supply disruption from the West Asia conflict but structurally better positioned than coal-DRI competitors for CCTS compliance.
Scrap-EAF speciality producers: Below the 1.25 tCO₂/ts threshold, these plants — producing stainless steel, alloy steel, or speciality grades — are structural CCC sellers or marginal compliers. Their CBAM exposure is also structurally lower than BF-BOF competitors given lower embedded emissions per tonne.
The sponge iron tier: highest required cuts, most heterogeneous emissions, most MRV risk
The 114 small units — producing under 100,000 tonnes in FY2023-24 — span the widest GEI range in the entire gazette dataset. The highest-emitting unit has a baseline GEI of 8.25 tCO₂/ts — a coal-based sponge iron rotary kiln operation almost certainly. The lowest-emitting small units are sponge iron plants using superior raw materials or gas, with GEIs around 1.35 tCO₂/ts. The mean baseline GEI for small plants is 2.92 tCO₂/ts.
Under CCTS, small units face an average required reduction of approximately 6 percent through to FY2027 — the steepest trajectory of any plant size category. However, many small units were not assigned an intermediate FY2025-26 target, meaning their compliance obligation runs only against the FY2026-27 endpoint. The LSE Grantham analysis attributes this either to pre-existing PAT Scheme commitments running to 2027, or to a deliberate policy decision to give smaller units additional adjustment time.
The operational MRV risk for small units is the most significant in the sector. Many of these plants — sponge iron rotary kilns, smaller EAF producers, ferro-alloy units — have limited internal capacity to build monitoring plans, engage ACVAs, and submit Form A through the ICM Portal by the June 2026 deadline. The ACVA shortage (50 to 60 agencies for 740 obligated entities across nine sectors nationally) is most acute for small and medium steel units where the verification fee relative to plant size creates an economic disincentive for timely engagement. Plants that miss the Form A deadline face Environmental Compensation from CPCB as a separate obligation, independent of their GEI compliance position.
Who earns CCCs and who must buy them — at Rs 1,740/tCO₂e
Structural CCC buyers — BF-BOF and coal-DRI plants
Large BF-BOF plants operating at 2.5 to 3.6 tCO₂/ts face approximately 2% annual reduction requirements — achievable through energy efficiency alone but leaving them exposed to cost escalation if Phase 2 targets tighten to 5 to 8%. Coal-based DRI-IF units at 2.5 to 4.5 tCO₂/ts face steeper cuts and less technological flexibility. At Rs 1,740/tCO₂e and a 0.15 tCO₂/ts shortfall, a 7-million-tonne plant faces approximately Rs 18.3 crore per year in CCC purchase costs. If Phase 2 targets tighten and the CCC price reaches Rs 3,000, that same shortfall costs Rs 31.5 crore per year.
Structural CCC sellers — EAF scrap and gas-DRI plants
EAF scrap plants operating at 0.14 to 0.28 tCO₂/ts are structural sellers at any market price — their outperformance against even the most lenient target is so large that banking surplus CCCs for Phase 2 is straightforwardly rational. A 4-million-tonne EAF plant outperforming its target by 0.10 tCO₂/ts earns 400,000 CCCs — worth Rs 69.6 crore per year at current prices or Rs 120 crore at projected Phase 2 prices. This is not a compliance benefit. It is a revenue line.
What outperformance and shortfall look like in rupees — a worked illustration
| Plant Type | Baseline GEI (tCO₂/ts) | FY2026-27 Target | Output | If GEI achieved = target | Financial impact at Rs 1,740/tCO₂e |
|---|---|---|---|---|---|
| EAF scrap (large) — e.g. Tata BSL EAF | 0.15 | 0.14 | 4 MT | Marginal outperformer — earns small surplus; large structural advantage vs BF-BOF peers | CCC surplus: ~40,000 units; Revenue: ~Rs 7 crore |
| Best-in-class BF-BOF — e.g. AMNP Hazira | 2.27 | 2.17 | 9 MT | Marginal complier — meets target with energy efficiency programme, no CCC purchase needed | Neutral; savings: ~Rs 16.7 crore vs purchasing to cover a 0.10 shortfall |
| Tata Steel Jamshedpur | 2.38 | 2.27 | 10 MT | Marginal — meets target if PAT-era efficiency improvements continue; CBAM MRV already operational | Neutral; small outperformance scenario: Rs 17 crore CCC revenue |
| JSW Vijayanagar (typical BF scenario) | 2.65 | 2.51 | 12 MT | Buyer if GEI achieved = 2.58 (0.07 above target) | CCC purchase: 840,000 units = Rs 146 crore. Penalty if not purchased: Rs 292 crore |
| SAIL Bhilai (typical PSU BF scenario) | 2.80 | 2.66 | 7 MT | Buyer if GEI achieved = 2.72 (0.06 above target) | CCC purchase: 420,000 units = Rs 73 crore. Penalty if not purchased: Rs 146 crore |
| Coal-DRI IF (medium, high-emission) | 3.50 | 3.29 | 0.5 MT | Buyer if GEI achieved = 3.40 (0.11 above target) | CCC purchase: 55,000 units = Rs 9.6 crore. Penalty: Rs 19.1 crore |
The Grantham critique, and why the smart money is not waiting for Phase 2
The LSE Grantham Institute’s August 2025 analysis is the most rigorous independent assessment of the steel CCTS targets published to date. Its central finding — that large BF-BOF plants face only approximately 2 percent annual GEI reduction requirements, insufficient to drive the technological transformation required for deep decarbonisation — is correct and important. The targets as written will not force a single blast furnace to convert to EAF or H₂-DRI. They will drive incremental energy efficiency in coke ovens, waste heat recovery, and process optimisation. That is not nothing, but it is not the structural change the sector needs to meet the 2035 NDC trajectory.
However, the Grantham critique does not reduce the CCTS’s operational significance for plant-level CFOs. Four reasons.
First, Phase 1 establishes the measurement and verification infrastructure — monitoring plans, ACVA relationships, ICM Portal registrations, Form A processes — that Phase 2 will run on. Plants that build this infrastructure in FY2025-26 are positioned for Phase 2 compliance. Plants that delay are not.
Second, Phase 1 creates the CCC market and its price discovery mechanism. The Rs 1,740/tCO₂e current price is Phase 1 pricing. Phase 2 pricing — at 5 to 8% annual targets across nine sectors plus the anticipated power sector addition — will be materially higher. Banking surplus Phase 1 CCCs is a finite-time arbitrage opportunity that exists only for operators who are positioned to earn them now.
Third, Phase 1 targets interact with CBAM for export-oriented plants. A Tata Steel or JSW plant that builds the GEI measurement system for CCTS simultaneously reduces the cost of CBAM embedded emissions documentation for EU exports — because the underlying verified data is the same. The two compliance systems share a measurement base, and investment in one reduces the marginal cost of the other.
Fourth, the Green Steel Taxonomy’s procurement preference — which directs government infrastructure procurement toward steel meeting the 3-star (2.2 tCO₂/ts) threshold — creates a domestic revenue premium for outperformers that exists independently of CCTS compliance. Plants that can demonstrate 3-star or better GEI qualify for green procurement contracts. That premium compounds with CCTS CCC revenue to make early investment in GEI reduction doubly rewarding.
1. LSE Grantham Research Institute, Selvaraju S (August 2025) — “What does the CCTS mean for the Indian steel sector?” Primary analysis of 253-plant gazette dataset; plant-level GEI baselines and targets for large, medium, and small units; mean/median calculations; technology cluster analysis using 1.0 and 1.25 tCO₂/ts thresholds; AMNP Hazira (2.27→2.17), Tata Steel Jamshedpur (2.38→2.27), EAF cluster median (0.15→0.14); Phase 1 ambition assessment; LSE AI Anthropic used for coding and data cleaning with author review: LSE Grantham Institute
2. MoEFCC, Draft Gazette Notification G.S.R. 405(E), 23 June 2025 — 253-unit steel roster with baseline output, GEI, and FY2025-26 and FY2026-27 targets; source data for all plant-level figures: MoEFCC gazette PDF
3. MoEFCC Final Gazette Notification, 8 October 2025 — GEI Target Rules 2025 finalised; compliance obligations FY2025-26 and FY2026-27; Environmental Compensation at 2× average CCC price; 90-day payment window; Formula for CCC issuance and shortfall purchase: GEI Target Rules via CCC Consultants
4. ICAP Carbon Action Partnership (November 2025) — Final notification confirmed 8 October 2025; five sectors including iron and steel covered in second notification; 460+ additional installations; total 740 obligated entities; FY2023-24 baseline: ICAP
5. Anaxee Digital Runners (July 2025) — 260-plant steel roster analysis; sector median GEI 2.7 tCO₂/ts; JSW Ispat Mandir Hasaud 20% GEI reduction target; ferro-alloy specialists at 4–8 tCO₂/ts; mini-mill structural observations: Anaxee
6. Global Energy Monitor (March 2025) — India average BF-BOF emission intensity 3.83 tCO₂/ts; world average 1.85 tCO₂/ts; India 38% above global average; domestic iron ore quality constraints; coking coal ash content 18–49%; stranded asset exposure $124–187 billion for BF-BOF capacity in development: Global Energy Monitor
7. Reclimatize.in — India’s Green Steel Taxonomy (internal): Gazette 763(E) December 2024; 3-star threshold <2.2 tCO₂/t; 5-star threshold <1.6 tCO₂/t: Green Steel Taxonomy →
8. Reclimatize.in — Blast Furnace Reline-or-Retire Decision Under CCTS (internal): capital decision economics incorporating GEI trajectories and CCC price forecasts: Reline-or-Retire →