Gujrat


Gujarat boasts a turnover of $31.5 billion in the chemical industry and $50.8 billion in the coke and petroleum industry. The state ranks first in India to export chemicals and petrochemical products, leading in categories such as inorganic and organic chemicals, plastics, rubber, and more. In addition to these strengths, Gujarat hosts four refining complexes with a combined capacity of 102 MMTPA, representing 41% of India’s total refining capacity. However, these industries also contribute significantly to Particulate Matter (PM) emissions. To address this, the Gujarat Pollution Control Board (GPCB) took a pioneering step in 2019 by launching the world’s first market for trading particulate matter emissions in Surat through the Emissions Trading Scheme (ETS). This innovative scheme enables industries to “buy and sell” permits for emitting particulate matter, incentivising cleaner industrial practices by imposing financial responsibility on heavy polluters.

Under this scheme, the businesses that exceed the allowed particulate matter emissions must purchase permits from those that emit less. This system ensures that heavy polluters face higher costs, promoting financial responsibility to encourage cleaner practices.

ETS: WORLD’S FIRST SCHEME TO CURB PM EMISSIONS

  •  The Ministry of Environment, Forests, and Climate Change first conceptualised the pilot project in 2012. After months of mock trading, the project was officially launched on September 16, 2019, with 155 industries in Surat beginning to trade permits.
  • GPCB partnered with renowned researchers to execute the ETS. The University of Chicago, Yale University, and the Abdul Latif Jameel Poverty Action Lab were among the leading academic institutions involved in the project.
  • GPCB played a key role in this process by setting a limit on the total allowable particulate matter emissions for the industries involved. This limit is determined using historical emissions data gathered through the Continuous Emissions Monitoring System.
  • A World Economic Forum study revealed that an initial assessment of the scheme’s impact showed industries participating in the project reduced their PM emissions by 24%, with an 8% margin of error, compared to those operating under traditional regulations.

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EXPANSION AND SCOPE

The project successfully reduced particulate emissions in Surat by 20-30%, significantly improving air quality. ETS achieved these results without increasing industries’ operational costs, making it an economically viable solution for pollution control. After witnessing ETS’s steady success, the Gujarat Government resolved to expand it to other parts of the state. Ahmedabad, the most populous city of Gujarat, was the best spot for expanding and implementing ETS.

While inaugurating the ETS Ahmedabad Live Market, Shri Mulubhai Bera, the Honorable Minister of Forests and Environment, Government of Gujarat, said, “Gujarat has been a flagbearer of taking innovative initiatives to ensure a balance between economic development and environmental preservation. The Emissions Trading Scheme for Particulate Matter, the first in the world for PM emissions, is one of the examples of the unique initiatives the Government of Gujarat has taken to contain its emissions.”

In Ahmedabad, the Gujarat government has implemented the Continuous Emission Monitoring System (CEMS) in these industry clusters to ensure compliance with the established norms. If violations occur, penalties are imposed on the entire cluster. CEMS monitors emissions from industries participating in the ETS. Live trading among 118 industries in Ahmedabad began on September 5, 2023, marking a significant milestone in reducing industrial emissions and air pollution.

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The adoption of ETS provides a unique opportunity for industries in Gujarat to comply with environmental regulations and generate revenue by trading excess emissions. Companies that invest in cleaner technologies and improve energy efficiency can sell their surplus credits, creating a new revenue stream. With Gujarat’s industrial growth projected to expand, especially in the chemicals and textile sectors, ETS offers a sustainable growth model that effectively addresses environmental challenges.

Gujarat’s pioneering efforts in launching and expanding the ETS underscore the state’s commitment to sustainable
industrial growth. With tangible results already visible in Surat, the expansion of ETS across Gujarat presents a robust opportunity for businesses to align environmental responsibility with profitability. As the global shift towards cleaner technologies intensifies, Gujarat sets a powerful example of how carbon markets can drive industrial and environmental transformation.

 

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