Environmental Disputes and ESG Regulatory | July-August 2025 Edition

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Supreme Court judgement

Acquisition of land does not violate any constitutional/fundamental right of the displaced persons

The Supreme Court of India, in its judgement dated July 14, 2025, in the case of Estate Officer, Haryana Urban Development Authority and Ors. vs. Nirmala Devi,[1] held that in cases of land acquisition a plea based on deprivation of the right to livelihood under Article 21 of the Constitution will not legally sustainable. It observed that the oustees will be entitled to resettlement and rehabilitation as per the policy framed for the oustees of the project concerned. Furthermore, when land is acquired for any public purpose the person whose land is taken away is entitled to appropriate compensation in accordance with the settled principles of law. It is only in the rarest of the rare case that the Government may consider floating any scheme for rehabilitation of the displaced persons over and above paying them compensation in terms of money. It further stated that a grant of mandatory injunction under Section 39 of the Specific Relief Act, 1963 is discretionary, and can be granted only upon the breach of an enforceable legal obligation. For granting a mandatory injunction under Section 39 of the Specific Relief Act, 1963, as developed over time by a catena of decisions of the court, the following conditions must be satisfied:

1. Obligation: There must be a clear obligation on the part of the defendant.
2. Breach: A breach of that obligation must have occurred or be reasonably apprehended.
3. Necessity: It must be necessary to compel the performance of specific acts to prevent or rectify the breach.
4. Enforceability: The court must be able to enforce the performance of those acts.
5. Balance of convenience: The balance of convenience must be in favour of the party seeking the injunction.
6. Irreparable injury: The injury or damage caused by the breach must be irreparable or not adequately compensable in monetary terms.

 

National Green Tribunal order

National Green Tribunal grants 4 (four) weeks for removing the encroachments from the flood plain of River Hindon

The National Green Tribunal, New Delhi, vide order dated July 23, 2025, in the case of Shri Krishan Kashyap vs. State of Uttar Pradesh, has granted the Irrigation Department and Greater Noida Industrial Development Authority, 4 (four) weeks’ time to file the progress report on removing the encroachments from the flood plain of River Hindon.

 

Regulatory updates

Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2025 notified

The Ministry of Environment, Forest and Climate Change (“MoEFCC”), on July 1, 2025, has notified the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2025 (“EPR Amendment Rules”), introducing a comprehensive Extended Producer Responsibility (“EPR”) framework for scrap of non-ferrous metals such as aluminium, copper, zinc and their alloys. The EPR Amendment Rules, which will come into force from April 1, 2026, aim to improve traceability, incentivise recycling and reduce environmental damage caused by improper handling and disposal of metal scrap. A centralised certificate-based mechanism has been introduced, supported by an online portal, to ensure compliance, monitor flows and enable trading of EPR obligations. The EPR framework covers producers, recyclers, refurbishers, collection agents and bulk consumers. All stakeholders must register with the Central Pollution Control Board (“CPCB”) on a dedicated online portal, with separate registration required for each operational role.

Producers must meet increasing recycling targets from 10% in FY 2026–27 to 75% by FY 2032–33 either through in-house recycling or by purchasing tradable EPR certificates issued to registered recyclers. For eligible products, refurbishing is incentivised with certificates that allow partial deferral of recycling obligations. A minimum recycled content requirement for manufacturers will apply from FY 2028–29 (ranging from 5%–25%).

The CPCB portal will manage registrations, reporting, certificate trading, and compliance monitoring. Returns are mandatory (half-yearly and annual), and penalties, including registration revocation and environmental compensation, apply for non-compliance. Oversight is led by CPCB and a multi-stakeholder Steering Committee, with State Pollution Control Boards (“SPCBs”) supporting on-ground enforcement and awareness.

 

Amendments to the Delhi Solar Energy Policy 2023

The Ministry of Power (“MoP”), vide notification dated July 10, 2025, has notified the amendments to the Delhi Solar Policy 2023. Some of the key amendments are as follows:

1. Hybrid RESCO Model is re-defined: It is redefined to mean the consumer pays the Renewable Energy Service Company (“RESCO”) developer via the Distribution Company (“Discom”) under a single bill, with net-metering benefits also reflected in the same bill.
   RESCO is a company that invests in, installs, owns, operates, and maintains rooftop solar plants (or other renewable energy systems) on behalf of consumers. The consumer does not own the plant. As per previous definition, the consumer had no direct commercial relationship with the RESCO for power purchase. The Discom bought solar power from RESCO, and the consumer benefitted via net-metering credits only. Hybrid RESCO now shifts the commercial flow.

2. Capital subsidies revised: Residential Consumers – INR 10,000 (Indian Rupees ten thousand)/unit up to 3kW (maximum INR 30,000 (Indian Rupees thirty thousand)). Group Housing Societies / RWA – INR 2,000 (Indian Rupees two thousand)/ unit up to 500kW (including EV charging, capped at 3kW per house).
3. Generation Based Incentive (“GBI”): Previously, in the Hybrid RESCO model GBI would be paid directly to the RESCO developer because the RESCO owns the plant. Amended policy deletes the specific sentence about paying GBI to RESCO under Hybrid RESCO.
   This change could be since RESCOs are already recovering costs through the tariff paid via the Discom billing structure.

4. PMSG-based Installations i.e. National Portal: Applications for net-metering will be routed through the National Portal (PM Surya Ghar- PMSG portal) to the Discom. Non-PMSG Installations – applications to be through the Delhi State Portal or directly through Discoms.
   Applications on PMSG portal are now connected with the Ministry of New and Renewable Energy’s direct benefit transfer/subsidies.

5. Apex Committee: Constitution of an Apex Committee to monitor policy implementation has also been deleted in this amendment.

 

Environment (Protection) Third Amendment Rules, 2025

MoEFCC, vide notification dated July 11, 2025, has notified the Environment (Protection) Third Amendment Rules, 2025. A proviso is inserted to Schedule I (against serial number 5A) of the Environment (Protection) Rules, 1986, stating that MoEFCC may, in consultation with the Central Electricity Authority and CPCB, for reasons to be recorded in writing, grant an exemption to thermal power plants from installation of cooling towers.

 

Environment (Protection) Fourth Amendment Rules, 2025

MoEFCC, vide notification dated July 11, 2025, has notified the Environment (Protection) Fourth Amendment Rules, 2025 (“Notification”), where the mandates regarding meeting sulphur dioxide emission norms are yet again changed. In the past 10 (ten) years, the mandate for construction of Flue Gas Desulfurisation (“FGD”) by thermal power plants governed the field. FGD was envisaged to control sulphur emissions. Most thermal power plants experienced repeated delays due to high-cost requirements of installation of FGD.

Simultaneously it was found that ambient SO₂ levels remained within national limits across much of the country due to low sulphur content in Indian coal. Studies showed that FGD retrofits would have limited air-quality benefits in many regions. In response, CPCB and MoEFCC re-examined the FGD framework. The amendment exempts most thermal power plants from the requirement of construction of FGD as follows:

1. the Notification now exempts about 79% of thermal capacity in the country (Category C): Plants beyond 10 km of Delhi/NCR or other million-plus/critically polluted cities no longer face mandatory SO₂ limits and need only meet old stack-height criteria by December 31, 2019;
2. the Notification keeps 11% of capacity under review (Category B):
   • plants near other polluted or non-attainment areas will be assessed on case to case basis;
   • Category B plants are any thermal power plants within 10 km of a CPCB designated critically polluted area (industrial hotspots) or a non-attainment city (one that has failed to meet NAAQS for any pollutant); and
   • Category B plant which already holds an environmental clearance can now log into the MoEFCC’s PARIVESH online portal and formally request a review of whether the new SO₂ emission standards should apply to them. The Expert Appraisal Committee will thereafter examine the requirement of either FGD (to be constructed by December 31, 2028) or minimum stack height compliance;
3. the Notification maintains hard SO₂ controls for about 10% of capacity (Category A): Plants within 10 km (ten kilometers) of the NCR or any city with more than 1 million people must install FGDs and comply by December 31, 2027; and
4. any plant retiring before December 31, 2030, can skip installation of FGD upon furnishing an undertaking where if it continues to run past its stated retirement date without having met the SO₂ norms (i.e. without an FGD), it will pay an environmental compensation of INR 0.40 (Indian Rupees zero point forty) per unit (kWh) for electricity generated post December 31, 2030.

Categorisation of thermal power plants was first done by MoEFCC through notification dated March 31, 2021. Majority of coal plants formed part of Category C. The Notification brings major relief for plants in less-populated regions, saving costly FGD capex of about INR 1,20,00,000 (Indian Rupees one crore twenty lakh)/MW along with hurdles of commissioning downtime. At the same time metropolitan airsheds and hotspots will still get emission controls by 2027. The Notification avoids a one-size-fits-all approach while honouring public health requirement.

 

Environment (Protection) Fifth Amendment Rules, 2025

MoEFCC, vide notification dated July 21, 2025, has notified the Environment (Protection) Fifth Amendment Rules, 2025. Amendments are made to Schedule-l, serial number 36 (entries relating to aluminium plants). The emission standards for aluminium plants stand revised. These amendments will come into force on July 21, 2027.

 

Environment (Protection) Sixth Amendment Rules, 2025

MoEFCC, vide notification dated July 22, 2025, has notified the Environment (Protection) Sixth Amendment Rules, 2025. Amendments are made to Schedule-l, serial number 40 (entries relating to pesticide industry). New standards for effluent discharge and air emission are introduced, to curb pollution from chemical waste and protect water and air quality. Further, the existing pollution control norms are replaced with updated pollutant limits and environmental parameters to encourage sustainable industrial practices within the pesticide sector.

 

Environment (Protection) (Management of Contaminated Sites) Rules, 2025

MoEFCC, vide notification dated July 24, 2025, has notified the Environment (Protection) (Management of Contaminated Sites) Rules, 2025 (“MCS Rules”) under the Environment (Protection) Act, 1986. The MCS Rules create a national framework for the identification, assessment and remediation of contaminated sites impacted by hazardous and toxic substances. They constitute India’s first dedicated legal framework for the systematic identification, assessment, remediation and monitoring of chemically contaminated sites across the country. They establish a science-based, time-bound process grounded in strict liability and the polluter-pays principle, to protect human health and ecological integrity from legacy industrial and hazardous contamination. The MCS Rules have defined terms such as “Contaminated Site” and “Responsible Person”, with details of threshold contaminant levels specified for soil and water. Local bodies must identify suspected sites, while SPCBs conduct assessments and publish confirmed site lists via a central online portal. Once listed, SPCBs must initiate remediation within three months, directing the person responsible to prepare and fund a remediation plan. Where no responsible party is identified (orphan sites), SPCBs or State Governments take over remediation. Plans must include risk assessments, technologies, financials and health/safety measures, and require SPCB approval. Funding sources include environmental compensation funds, State andCentral cost-sharing and the Environmental Relief Fund. Responsible parties must reimburse public expenditures within 3 (three) months. SPCBs and CPCB may impose environmental compensation for non-compliance. Voluntary remediation is permitted with conditions but does not exempt liability. Oversight is ensured through expert committees, digital monitoring and mandatory reporting. All actions must align with CPCB-issued standard operating procedures and guidelines.

 

Proposal to amend provisions relating to related party transactions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Securities and Exchange Board of India (“SEBI”), vide notification dated August 4, 2025, has notified a consultation paper on amendments to provisions relating to Related Party Transactions (“RPTs”) under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”). Some of the key proposals are as follows:

1. threshold for determining material RPTs undertaken by listed entities;
2. threshold for determining material RPTs undertaken by subsidiaries of a listed entity;
3. relaxation in the minimum information to be furnished to the audit committee and shareholders for the approval of RPTs;
4. inclusion of a new provision (Regulation 23(4)) with respect to validity of omnibus approval for RPTs granted by the shareholders; and
5. explanation to clarify that the exemption from RPT approval requirements are applicable to transactions between a listed holding company and its wholly owned subsidiary.

 

Master Circular for Environmental, Social, and Governance Ratings and Data Products Providers in International Financial Services Centres

The International Financial Services Centres Authority (“IFSCA”), vide notification dated August 5, 2025, has notified the Master Circular for Environmental, Social, and Governance (“ESG”) Ratings and Data Products Providers (“ERDPP”) in International Financial Services Centres (“IFSCs”). This circular specifies the requirements/ directions on various provisions pertaining to ERDPP under the IFSCA (Capital Market Intermediaries) Regulations, 2025 (“CMI Regulations”). Some of the key aspects are as follows:

1. an entity desirous of seeking registration as an ESG ratings and data products provider must apply to IFSCA for registration under the CMI Regulations and submit/file its applications exclusively through Single Window IT System (SWIT System);
2. the certificate of registration granted to a Capital Market Intermediary (“CMI”) will be perpetual unless it is suspended or cancelled by IFSCA;
3. ERDPP registered with IFSCA must have a principal officer and a compliance officer based out of the IFSC in compliance with the qualification and educational requirements as specified in the CMI Regulations;
4. the ERDPP must comply with the IFSCA (Anti Money Laundering, Counter Terrorist-Financing and Know Your Customer) Guidelines, 2022 and circulars and directions issued thereunder. Further, the ERDPP must ensure that the registration on FIU-IND FINGate 2.0 portal (“FIU-IND Portal”) is completed prior to commencement of business and in case of an urgency to commence business, the registration must be completed within 30 (thirty) days from the date of commencement of business. The ERDPP must also ensure that any addition or modification to their line of business is updated on the FIU-IND portal within a period of 30 (thirty) days from the date of commencement of such an additional line of business;
5. the ERDPP providing ESG ratings must have guidelines/criteria/methodology on the rating process and the same must be disclosed on its website. Further, the ERDPP must segregate its activities relating to ESG Ratings and ESG Data Products from its other activities to ensure that there is no conflict of interest between these activities;
6. in terms of code of conduct provided under Schedule II of the CMI Regulations, the ERDPPs are required to have an internal policy for outsourcing of its activities from outside of IFSC prior to commencement of operations and the ERDPP must ensure compliance with the policy at all times;
7. the ERDPP must intimate IFSCA, within 15 (fifteen) days of any direct or indirect change in control of the intermediary; and
8. the ERDPP must submit reports to IFSCA on a quarterly basis in accordance with the requirements specified under the circular titled ‘Reporting Norms for Capital Market Intermediaries’ dated February 08, 2024. Further, in terms of Regulation 25 of the CMI Regulations, the ERDPP must have an annual audit conducted in respect of compliance with the CMI Regulations and the copy of such compliance audit report for a financial year must be furnished to IFSCA by September 30 of such year.

 

Amendments to PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme

The Ministry of Heavy Industries, vide notification dated August 7, 2025, has notified the amendments to the PM E-DRIVE Scheme. The amendments made to the Scheme are as follows:

1. the PM E-DRIVE Scheme, with an outlay of INR 10,900 crore (Indian Rupees ten thousand nine hundred crore), will be implemented from October 1, 2024, to March 31, 2028, for faster adoption of Electric Vehicles (“EVs”), setting up of charging infrastructure and development of EV manufacturing eco-system in the country. Further, EMPS-2024 being implemented for the period from April 1, 2024, to September 30, 2024, is subsumed under this scheme; and
2. the total payout under the scheme will be limited to the scheme outlay of INR 10,900 crore (Indian Rupees ten thousand nine hundred crore). In case the funds for the scheme or its relevant sub-components are exhausted prior to the terminal date of the scheme i.e. March 31, 2028, then the scheme or its relevant subcomponents will be closed accordingly i.e., no further claims will be entertained. However, the terminal date for registered e-2W, registered e-rickshaws & e-cart and registered e-3W (L5) will be March 31, 2026.

 

Guidelines on municipal solid waste incineration-based waste to energy plants

CPCB, vide notification dated August 18, 2025, has issued the Guidelines on Municipal Solid Waste (“MSW”) Incineration-Based Waste to Energy (“WtE”) Plants (“WtE Guidelines”). The WtE Guidelines aim to establish a uniform regulatory framework for the development, operation, and monitoring of incineration-based WtE plants across India, addressing environmental, operational, and compliance challenges while enabling energy recovery from non-recyclable MSW.

Incineration-based WtE plants provide a viable solution for managing high-calorific, non-recyclable MSW by reducing landfill dependency and recovering energy in the form of electricity and heat. The WtE Guidelines align with the Solid Waste Management Rules, 2016 (“SWM Rules”) and promote circular economy practices, including safe utilisation of bottom ash in construction applications.

CPCB notes that several WtE plants in India have faced operational, environmental, and social challenges, including emission breaches, odour control failures, leachate contamination, and public health concerns. Accordingly, the WtE Guidelines prescribe a structured approach covering waste preprocessing, incinerator design, emission monitoring, ash and leachate management, and environmental safeguards. The WtE Guidelines apply to all existing, under-construction, and proposed WtE plants, Urban Local Bodies (“ULBs”), and regulators, ensuring that WtE facilities operate in an environmentally sound, technically efficient, and economically viable manner.

 

Salient features

1. Classification as ‘Blue Category’ projects: CPCB has classified MSW incineration-based WtE plants under the ‘Blue Category’ of projects, recognising them as ‘Essential Environmental Service’ for domestic waste facilities for managing domestic solid waste.
2. Viable solution for non-recyclable, high-calorific waste: The Guidelines highlight that WtE plants offer a technically viable solution for treating residual fractions of municipal solid waste that cannot be processed through composting, anaerobic digestion, or material recovery. These fractions typically include plastics, textiles, paper, and other high-calorific combustible components. Through controlled thermal treatment, WtE plants convert these waste streams into usable energy, achieving significant volume reduction while minimising uncontrolled Methane (“CH₄ (methane)”) emissions, leachate generation, and fire hazards caused by unscientific landfilling practices.
3. Alignment with the SWM Rules: The WtE Guidelines are fully aligned with the SWM Rules, and mandate compliance with the following key provisions:
   • Rule 15 of the SWM Rules: Responsibility of local bodies to facilitate construction and operation of solid waste processing facilities;
   • Rule 16 of the SWM Rules: SPCB/Pollution Control Committee to authorise, regulate, and monitor the facilities.
   • Rule 21 of the SWM Rules: Non-recyclable MSW with calorific value ≥1,500 (one thousand five hundred) kcal/kg cannot be landfilled and must be diverted to generating energy.
   • Schedule II (Part C) of the SWM Rules: Prescribes emission standards and mandates installation of advanced pollution control systems.
4. Hazardous Waste Management Rules, 2016 (“HWM Rules”): If the toxic metals in incineration ash (i.e. bottom ash and fly ash) exceeds the limits specified in the HWM Rules, then the disposal or beneficial use of bottom ash and fly ash will be governed by the HWM Rules.
5. WtE process framework: The WtE Guidelines outline a detailed process flow for energy recovery through incineration:
   • Step 1 – Waste reception and preprocessing: MSW delivered to plants undergoes radioactive scanning, weighing, homogenisation, and moisture control to improve calorific value.
   • Step 2 – Segregation: Manual and mechanical sorting to recover recyclables, compostables, and Refuse Derived Fuel (“RDF”).
   • Step 3 – Composting: MSW received at the WtE unit consists of organic fractions (approx. 8–10%) that are unsuitable for incineration and are therefore diverted for controlled composting to prevent boiler corrosion and emission spikes.
   • Step 4 – Incineration and energy recovery: RDF fraction after segregation is incinerated in moving-grate furnaces at ≥950°C, producing high-pressure steam for electricity generation while achieving approx. 80% volume reduction.
   • Step 5 – Ash and residue handling:
     • Bottom ash (20–30%) is recovered, tested, and potentially reused in construction if non-hazardous.
     • Fly ash (2–3%), containing toxic metals, is sent to secure landfills or pre-treated for safe secondary use.

Fig. 1 – MSW incineration-based WtE process

6. Environmental issues: The WtE Guidelines identify 4 (four) key environmental risks associated with WtE plants: Stack emissions: Incineration releases NOx, SO₂, CO, particulate matter, heavy metals, dioxins, and furans, which require strict control using advanced emission management systems.
   • Solid residues: Improper disposal of fly ash and bottom ash can lead to soil and groundwater contamination, necessitating safe handling and secure landfilling.
   • Leachate management: Untreated leachate from waste pits and ash handling areas can pollute surface and groundwater, requiring proper collection and treatment systems.
   • Odour control: Persistent odours from waste reception and processing zones cause community discomfort and regulatory challenges, making effective odour management essential.
7. Environmental management plan: The WtE Guidelines prescribe a comprehensive plan to ensure effective pollution control and regulatory compliance:
   • Air pollution control devices: Installation of lime dosing systems, activated carbon injection, and bag filters, along with Online Continuous Emission Monitoring Systems (“OCEMS”) for real-time emission tracking.
   • Leachate treatment: Provision of engineered drainage and leachate treatment plants using advanced technologies such as reverse osmosis, multi-effect evaporators, and mechanical vapour recompression evaporators to prevent water contamination.
   • Ash management: Bottom ash can be reused in construction if found non-hazardous, while fly ash containing toxic components must be securely landfilled or treated before secondary use.
   • Odour management: Use of negative-pressure systems to direct odorous air to boilers for combustion and herbal-based disinfectants for effective biological odour control.
8. Monitoring and compliance: All WtE plants are required to install OCEMS to continuously track emissions, including PM, NOx, SO₂, CO, HCl, HF, dioxins, and furans, and transmit real-time data to CPCB and SPCBs. Facilities must also conduct periodic sampling of treated leachate, bottom ash, and fly ash to ensure compliance with applicable environmental thresholds. Non-compliance may lead to suspension or revocation of authorisations, penalties under the Environment (Protection) Act, 1986, and mandatory corrective actions as directed by regulators.

 

Conclusion

The WtE Guidelines mark a significant step towards structured, compliance-driven municipal SWM in India. By introducing design-based safeguards, emission control measures, ash/leachate management standards, and continuous monitoring protocols, CPCB ensures that WtE plants operate sustainably while reducing landfill dependency. For project developers, ULBs, and regulators, the WtE Guidelines provide a clear institutional and technical roadmap to achieve environmentally responsible energy recovery from MSW.

 

Environment Audit Rules, 2025

MoEFC has notified the Environment Audit Rules, 2025 (“Audit Rules”) which have come into force on August 29, 2025. The Audit Rules establish a framework for certifying and registering environmental auditors to ascertain environmental compliance of the projects, activities or processes, thereby ensuring that audits are conducted in a systematic and structured manner. The deployment of certified auditors aims to enhance transparency and accountability and reduce conflicts of interest, thereby fostering both public confidence and a business-friendly environment.

 

Salient Features

1. Roles and responsibilities of registered environment auditors: Their functions, inter alia, include – (a) conducting environmental audits of projects, activities, or processes; (b) sampling and analysis of emissions, effluents, and wastes, and assess pollution control systems; (c) reporting violations or non-compliance with environmental regulations; (d) computing environmental compensation for non-compliance, where directed; (e) preparing and submitting audit reports; (f) verifying activities related to the Green Credit Registry, if directed; (g) undertaking environmental audits assigned by Central Pollution Control Board, State Pollution Control Boards or Pollution Control Committees, including under Extended Producer Responsibility frameworks; (h) conducting environmental audits assigned under the Ecomark Rules, 2024; (i) carrying out audits assigned under the Environment Impact Assessment Notification, 2006, and Coastal Regulation Zone notifications of 2011 and 2019; (j) auditing projects, activities, or processes, when assigned by project proponents; (k) verifying self-compliance reports submitted to ensure adherence to environmental standards and conditions; and (l) performing any other functions as may be specified by the Central Government.
2. Authority to visit sites and collect samples: In respect of assignments conferred by the Central or State Governments, registered environment auditors are empowered to enter project premises, collect samples and audit evidence, and access all relevant information and documents.
3. Roles and responsibilities of Environment Audit Designated Agency: Their functions, inter alia, include – (a) specifying minimum eligibility criteria for certified environmental auditors; (b) developing screening methods (exams or other processes) to identify qualified candidates for certified environmental auditors; (c) certifying environment auditors, including renewal, suspension, withdrawal, or cancellation of certification; (d) specifying criteria for registration of certified environmental auditors (e) registering certified environment auditors, including renewal, suspension, withdrawal, or cancellation of registration; (f) monitoring performance of registered environmental auditors and issue directions as needed; (g) facilitate capacity building through training, workshops, seminars, and online courses; (h) taking disciplinary action against certified or registered environmental auditors, when required; (i) specifying guidelines, procedures, and standards for certified and registered auditors’ functioning; (j) maintaining a publicly accessible online register of certified and registered environmental auditors; and (k) publishing an annual report within six months of each financial year and submitting it to the Central Government.
   The Central Government will notify Environment Audit Designated Agencies on the basis of eligibility criteria, terms, conditions, and tenure specified in its guidelines, with the power to revoke such notification at any time before the expiry of tenure based on performance. The tenure of such agencies may also be renewed, subject to fulfilment of the criteria prescribed in the guidelines.

4. Certification mechanism for environment auditors: The certification will be carried out by – (a) Recognition of Prior Learning (i.e., a mode of certification based on prior experience and expertise, which shall remain in operation for a limited period) and (b) National Certification Examination (a structured examination process for assessing eligibility for certification).
5. Code of conduct for registered environment auditor and certified environment auditor: The Central Government will issue guidelines on the code of conduct for certified and registered environmental auditors, covering aspects of integrity, ethics, confidentiality, and conflict of interest. Misrepresentation, suppression, falsification, or distortion of facts/data will be treated as professional misconduct. Strict confidentiality must be maintained and unauthorised disclosure of project-related information constitutes misconduct. For professional misconduct, the Government may: debar auditors (temporarily or permanently), suspend or revoke certification/registration or initiate action under applicable laws.
6. Allocation of assignments and fees: Registered environment auditors will be assigned to specific project entities through a random assignment method. Further, the amount and procedure for payment of the certification, registration and audit fee shall be determined by guidelines issued by the Central Government and will be binding on both, certified and registered environmental auditors.
7. Preventing conflict of interest: To maintain independence and avoid conflicts of interest, registered environmental auditors must not – (a) be related to the project owner, operator, occupier, or proponent;(b) hold or have held any financial interest in the project or its associated entities; (c) have provided services (other than independent reviews or auditing) to the project, process, or activity such that they would be auditing work performed by themselves or their firm; (d) accept inducements, commissions, gifts, or benefits from the auditee or related parties and (e) audit any project for which they prepared the Environmental Impact Assessment, Environmental Management Plan, or related reports forming part of the audit scope.
8. Steering Committee: The Audit Rules provide for formation of a Steering Committee, responsible for overall implementation, monitoring, and enforcement of the Audit Rules, and for reviewing and recommending amendments to the same and related guidelines.

 

Conclusion

Introduction of the Audit Rules furthers the Indian Government’s commitment towards Ease of Doing Business and principles of trust-based governance. Ensuring compliance with key statutes such as the Environment (Protection) Act, 1986, the Forest (Conservation) Act, 1980, the Wildlife Protection Act, 1972, the Green Credit Rules, 2023, along with other related regulations, is vital for protecting the environment from degradation while fostering sustainable development. The Audit Rules are expected to play a transformative role by strengthening compliance through independent third-party verification, making adherence to environmental norms more credible, measurable, and enforceable. By establishing a pool of trained and certified professionals, the Audit Rules enhance regulatory capacity, allowing government agencies to focus on high-risk enforcement and policy improvements. Most importantly, these audits will encourage proactive risk management by identifying non-compliance early and enabling timely corrective measures to prevent environmental harm.

 

Bureau of Energy Efficiency’s new draft methodologies under the carbon credit offset mechanism

The Bureau of Energy Efficiency (“BEE”), as the administrator of the Carbon Credit Trading Scheme, 2023 (“CCTS”), has released 3 (three) new draft methodologies for stakeholder consultation under the offset mechanism of the Indian Carbon Market (“ICM”). These methodologies provide standardised procedures for measuring, reporting, and verifying Greenhouse Gas (“GHG”) emission reductions from specific project activities that generate tradable carbon credits.

BEE has released several methodologies covering renewable energy projects, energy efficiency interventions, forestry and land-use projects, and waste management. The 3 (three) new draft methodologies expand the scope of eligible project activities into important sectors of India’s energy and agriculture economy. These methodologies will enable entities to implement projects that avoid emissions from fossil fuels and waste, while also creating new opportunities for rural farmers and industries to participate in the ICM.

 

Methodology 1 – Electricity and Heat Generation from Biomass

This draft methodology provides a standardised framework for projects replacing fossil fuels with biomass to generate electricity, heat, or both. By consolidating global best practices under the ICM, the methodology ensures robust measurement of emission reductions from biomass utilisation, residue management, and cogeneration systems.

 

Background and scope

This methodology applies to projects using biomass for generating electricity, heat, or both (cogeneration). It covers greenfield projects, capacity expansions, energy efficiency improvement, and fuel switching projects from fossil fuels to biomass.

 

Applicability conditions

For a project to be eligible, it must meet strict conditions:

1. Feedstock: Biomass used in the project plant is limited to biomass residues, biogas, RDF or biomass from dedicated plantations. Refuse Plastic Fuel (“RPF”) can be co-fired in the equipment but both RDF and RPF will be treated as fossil fuels for accounting. If non-obligated entities want to claim emission reduction for the biodegradable component in RPF, a revision to this methodology will be required.
2. Co-firing limit: Fossil fuels may be co-fired in the project plant but cannot exceed 80% of total energy input.
3. Residue use: If biomass residues come from another industrial process (e.g., sugar mills, sawmills), the project cannot cause an increase in that industrial production merely to generate more residues.
4. Storage and processing: Biomass must not be stored for more than 1 (one) year and cannot undergo chemical/biological processing (e.g., fermentation, pyrolysis), except mechanical treatments like drying, shredding, or pelletisation.
5. Heat and power balance: Any associated heat generation equipment must operate independently from the project, without influencing or being influenced by the project plant.
6. Plant Lifetime: If the project activities involves the replacement or retrofit of existing heat generation equipment, emission reductions can only be claimed until the end of the baseline equipment’s expected technical lifetime.

 

Project boundary and emission sources

The project boundary is broad covering inter alia on-site plants generating power and/or heat (whether fossil, biomass, or co-fired), connected grids (if power is exported), off-site heat sources that supply heat to the site where the ICM project activity is located, biomass transportation and processing, biomass residue disposal sites, geographic boundaries of the dedicated plantations, wastewater treatment facilities, anaerobic digestion sites, and related equipment. GHG inclusion varies by source, based on relevance and simplification.

 

Calculation of emission reductions

The methodology requires a step-wise calculation:

1. Additionality: The project must demonstrate that emission reductions are “additional”, i.e., they would not have occurred in the absence of the project. This requires identifying all realistic baseline scenarios such as continued fossil fuel use, grid power, or residue burning. The project must also prove that switching to biomass requires new investment or overcomes barriers that prevent business-as-usual continuation.
2. Baseline emissions: Baseline emissions are calculated differently depending on the project type, i.e., (a) cogeneration (heat + power), (b) Power-only plants and Heat-only systems. In all cases, the baseline represents the emissions that would occur if the project were not implemented.
3. Project emissions: Project emissions include all direct and indirect GHGs arising from project activity, including emissions from project activities, including emissions from biomass and biomass residues, fossil fuel consumption, grid electricity imports, reduced electricity generation, biomass combustion, and biogas production. These emissions can result from biomass and biomass residues, fossil fuel consumption, grid electricity imports, and reduced electricity generation.
4. Leakage: Leakage refers to GHG emissions that occur outside the immediate project boundary as a result of the project activity (for example, from transporting biomass over long distances or shifting biomass use from one sector to another). This methodology prevents over-crediting by not issuing Carbon Credit Certificates (“CCCs”), if, in any given year, the leakage emissions are so high that the project shows negative overall emission reductions. Moreover, issuance will be suspended in subsequent years until the project has generated sufficient positive emission reductions to fully compensate for the earlier negative balance.
5. Net emission reductions: The final emission reductions are calculated as:
   Net reductions = baseline emissions – (project emissions + leakage)
   This ensures that only real, measurable, and additional reductions are credited.

6. Monitoring requirements: Monitoring is central to the methodology and relies on approved ICM tools. Key monitored parameters inter alia include type and volume of biomass feedstock, amount of fossil fuel co-fired, net electricity generation and/or heat supplied, moisture content, efficiency of conversion systems (boilers, turbines), biomass transport distances and modes, and lifetime of retrofitted equipment. Data must be monitored continuously and aggregated as appropriated, to calculate emissions reduction.

Biomass Methodology is a comprehensive framework covering power-only, heat-only, and cogeneration projects. It incentivises efficient biomass use, avoids CH₄ (methane) emissions, and ensures robust monitoring. For industries and power producers, it provides a credible pathway to earn CCCs under the CCTS.

 

Methodology 2 – Production of Compressed Biogas

This methodology provides a framework for projects that capture and utilise CH₄ (methane) from organic waste streams to produce renewable gas. By adopting best practices from United Nations Framework Convention on Climate Change Clean Development Mechanism (“CDM”) and gold standard methodologies, it ensures transparent accounting of avoided CH₄ (methane) emissions and displacement of fossil fuels. The methodology is critical in linking waste management, renewable energy, and the transport sector under the ICM.

 

Background and scope

The methodology applies to projects that establish new plants for the anaerobic digestion of waste leading to the production of compressed biogas. It covers a wide range of feedstocks, including but not limited to, napier grass, agricultural residues and waste, press mud, waste from agri-product manufacturing industries, animal waste, MSW, etc. Further, the Compressed Biogas (“CBG”) produced may be utilised for cogeneration, electricity generation, industrial heat, or directly as a transport fuel (substitute for CNG).

 

Applicability conditions

The methodology applies to project activities that install and operate new plants for the treatment of waste through combination of: (a) anaerobic digestion processes; (b) co-composting of wastewater; and (c) Anaerobic co-treatment of wastewater, all leafing to the production of compressed biogas. Hazardous waste and wastewater are not eligible under this methodology.

 

Project boundary and emission sources

The project boundary for production of CBG covers both the baseline and project facilities to ensure all relevant emissions are accounted for. It includes the landfill or sludge pits where waste would otherwise have been disposed, the anaerobic digestion plant producing CBG, and any related electricity or heat generation, fuel use, and wastewater treatment. If electricity is exported, the grid is part of the boundary. However, if upgraded biogas is injected, the natural gas distribution system is also included.

Within this boundary, only the main GHG are considered for calculations, primarily CH₄ (methane) from landfills, sludge pits and digesters, and Carbon Dioxide (“CO₂”) from fossil fuel use or combustion of fossil-based waste. Minor gases such as Nitrous Oxide (“N₂O”) are generally excluded for simplification. This ensures the boundary captures the most significant emission sources without making the methodology overly complex.

 

Calculation of emission reductions

The methodology follows a structured approach for calculations which is described as below:

1. Additionality: The project must demonstrate that CH₄ (methane) capture and CBG production would not occur under business-as-usual. This involves showing that, in the absence of the project, waste would continue to be landfilled, burnt, or treated anaerobically without recovery.
2. Baseline emissions: Baseline emissions represent the GHG released if the project were not implemented. These include CH₄ (methane) from unmanaged landfills or sludge pits, and CO₂ from fossil fuel-based electricity, heat, or mechanical energy that the CBG project will now replace. The methodology provides detailed formulas for each case, whether the project displaces grid electricity, thermal energy, mechanical energy, or cogeneration output.
3. Project emissions: CBG projects continue to generate emissions which must be accounted for. These mainly arise from composting or co-composting, which can emit CH₄ (methane) and N₂O, anaerobic digestion and biogas combustion including any leakage and the energy used to upgrade or compress biogas, electricity and fossil fuel use for plant operations, wastewater treatment, and combustion units such as gasifiers, which release CO₂, CH₄ (methane), and N₂O. These sources contribute to the project emissions, which are subtracted from the baseline to determine net emission reductions.
4. Leakage: Leakage refers to indirect emissions outside the immediate project boundary. Examples include emissions from transporting biomass or waste over long distances, or situations where diverting waste to CBG reduces the availability of that material for recycling. If, in any given year, if the leakage is so high that overall emission reductions turn negative, the methodology provides a safeguard wherein no CCCs will be issued until positive reductions in later years compensate the deficit.
5. Net reductions:
   Finally, the emission reductions credited to the project are calculated as:
   Net reductions = baseline emissions – (project emissions + leakage)
   This ensures that only real, measurable, and additional emission savings are rewarded with CCCs.

6. Monitoring requirements: The methodology requires continuous monitoring of key project parameters to ensure transparent and accurate calculation of emission reductions. This includes tracking the quantity and calorific value of upgraded biogas, the volume and composition of waste and wastewater treated, combustion efficiency and stack gas emissions from digesters or combustors. Energy flows are also closely monitored, covering electricity consumed on-site, electricity and heat supplied to the grid or recipient facilities, and fossil fuel use. Additional checks include measuring wastewater characteristics (like COD), recording abnormal operations, and ensuring agricultural by-products or land-use impacts are documented. All measurements must follow approved ICM tools, use calibrated equipment, and be aggregated monthly or annually as specified, to ensure consistency and reliability.

The CBG methodology plays a key role in bringing waste-to-energy projects into the ICM. It offers a reliable system for measuring emission reductions, supports India’s Sustainable Alternative Towards Affordable Transportation (“SATAT”) programme and clean transport targets, and encourages large-scale biogas plants. In doing so, it delivers 3 (three) clear benefits: (a) cutting CH₄ (methane) emissions from waste, replacing fossil compressed natural gas (CNG) with renewable fuel, and creating rural jobs through feedstock collection and by-product use.

 

Methodology 3 – CH₄ (methane) reduction in rice cultivation

This methodology provides a structured framework for projects that lower CH₄ (methane) emissions from paddy fields by adopting improved water and crop management practices. It adapts global best practices under the ICM to agriculture, ensuring that emission reductions are measurable, additional, and verifiable, while safeguarding yields.

 

Background and scope

The methodology applies to rice farming projects that reduce CH₄ (methane) emissions through changes in cultivation practices. The methodology includes projects such as:

1. rice farms that change the water regime during the cultivation period from continuously to intermittent flooded conditions and/or a shortened period of flooded conditions;
2. Alternate Wetting and Drying (“AWD”) method and aerobic rice cultivation methods; and
3. rice farms that change their rice cultivation practice from transplanted to Direct Seeded Rice (“DSR”).

 

Applicability conditions

The methodology applies only to rice cultivation projects that meet specific conditions:

1. the project area must predominantly consist of irrigated, continuously flooded fields during the growing season;
2. rice fields must be equipped with controlled irrigation and drainage facilities, allowing farmers to alternate between dry and wet conditions as required;
3. the project must not reduce rice yields and cannot force farmers to switch to cultivars not previously grown in the area;
4. farmers must receive training and technical support on field preparation, irrigation, drainage, and fertiliser use. The project must ensure that supplemental nitrogen needs are assessed scientifically (e.g., with leaf colour charts, photo sensors, or soil test strips) or based on recognised recommendations;
5. the cultivation practices introduced, including technologies and crop protection products, must not conflict with local regulations; and
6. if the project chooses the default IPCC Tier 1 values (i.e., standard global factors for CH₄ (methane) emissions), no direct field measurements are required. But if the project wants to use field-specific data for greater accuracy, then it must have access to proper infrastructure, such as closed chamber equipment and laboratory analysis, to measure CH₄ (methane) emissions from reference fields.

 

Project boundary

The project boundary is limited to the rice fields where the improved practices are implemented.

 

Calculation of emission reductions

The methodology prescribes a step-wise approach for estimating emission reductions from rice cultivation projects:

1. Baseline emissions: The baseline represents CH₄ (methane) emissions under conventional practices, typically transplanted rice with continuous flooding. These emissions are established either by using reference fields (field measurements of CH₄ (methane) emissions under traditional methods) or by applying IPCC Tier 1 default emission factors.
2. Project emissions: CH₄ (methane) emissions are calculated for the rice fields under the new practices. Adjustments are also made for any potential increase in N₂O from fertiliser use.
3. Leakage: While generally negligible, leakage must be considered if rice cultivation shifts outside the project boundary in ways that could offset reductions.
4. Net reductions: The final emission reductions are derived using the formula:

Net Reductions = Baseline Emissions – Project Emissions

 

Monitoring requirements

Projects must establish robust monitoring systems to ensure credible emission reduction estimates. Key parameters include CH₄ (methane) emission factors for both baseline and project fields (measured with IPCC methods or default factors), cultivation area and duration, use of organic amendments and fertilisers, and any fossil fuel consumption during land preparation. Farmers are required to maintain logbooks documenting sowing dates, fertiliser and amendment applications, irrigation schedules, water regime changes, and yields. These records help verify that the project practices (e.g., AWD or DSR) are actually implemented and representative of the reference fields. Only farms that comply with the defined cultivation practices are included in the calculation of emission reductions. All data must be aggregated seasonally and annually, supported by field surveys and sampling in line with CDM/ICM guidelines.

The Rice Methane Reduction methodology extends the ICM into the agricultural sector, offering farmers a direct role in climate mitigation. It incentivises climate-smart practices like AWD and DSR, which not only cut CH₄ (methane) emissions but also conserve water and maintain productivity. By providing a credible pathway for agricultural projects to generate CCCs, the methodology brings smallholder farmers into ICM framework and strengthens the link between sustainable agriculture and climate action.

 

 

Conclusion

The release of these 3 (three) draft methodologies marks a significant step in expanding the ICM under the CCTS. By covering biomass-based energy, compressed biogas, and rice CH₄ (methane) reduction, BEE has brought both industry and agriculture into the fold of the offset mechanism. These methodologies not only provide credible frameworks for emission reduction accounting but also create avenues for farmers, industries, and project developers to participate in carbon markets. Collectively, they advance India’s climate goals by reducing reliance on fossil fuels, cutting CH₄ (methane) emissions from waste and agriculture, and enabling sustainable growth across key sectors of the economy.

 

Other developments

Rio de Janeiro Declaration- Strengthening Global South Cooperation for a more Inclusive and Sustainable Governance

The Prime Minister’s Office, vide press release dated July 7, 2025, has announced that the leaders of BRICS countries met in Rio de Janeiro, Brazil, on July 6 and July 7, 2025, for the XVII BRICS Summit held under the theme: ‘Strengthening Global South Cooperation for a more Inclusive and Sustainable Governance’. Key environmental outcomes included the adoption of the BRICS Leaders’ Framework Declaration on Climate Finance and endorsement of inclusive approaches to climate action, reflecting a shared vision for climate justice. The bloc also addressed the governance of emerging technologies, notably with the BRICS Leaders’ Statement on the Global Governance of Artificial Intelligence, which emphasised responsible and ethical AI development with equitable access and safeguards, especially for developing countries.

 

Cabinet approves enhanced delegation of power to NTPC Limited for investing in NTPC Renewable Energy Limited and its other joint ventures/ subsidiaries to set up renewable energy capacity

MoP, vide press release dated July 16, 2025, has announced that the Cabinet Committee on Economic Affairs has granted enhanced delegation of power to NTPC Limited from the extant guidelines of delegation of power to Maharatna CPSEs for making investment in NTPC Green Energy Limited (“NGEL”), a subsidiary company and subsequently, NGEL investing in NTPC Renewable Energy Limited and its other joint ventures/ subsidiaries beyond earlier approved prescribed limit of INR 7,500 crore (Indian Rupees seven thousand five hundred crore) upto an amount of INR 20,000 crore (Indian Rupees twenty thousand crore) for renewable energy capacity addition to achieve 60 GW renewable energy capacity by 2032. The enhanced delegation given to NTPC and NGEL will facilitate accelerated development of renewable projects in the country. This move will also play a vital role in strengthening power infrastructure and ensuring investment in providing reliable, round-the-clock electricity access across the nation.

 

Commission for Air Quality Management Sets Up Dedicated Cell in SAS Nagar(Mohali), Punjab for Year-Round Monitoring and Coordination of Paddy Stubble Management

MoEFCC, vide press release dated July 29, 2025, has announced that the Commission for Air Quality Management (“CAQM”) has established a Dedicated CAQM Cell at SAS Nagar (Mohali), Punjab to ensure comprehensive and sustained efforts for the management of paddy stubble in Punjab and Haryana. The newly established Cell will function throughout the year, overseeing the entire ecosystem of paddy stubble management, from planning and farmer engagement to coordinating with stakeholders and monitoring the supply chain for continuous and assured delivery of paddy straw to end-users. In addition to its core mandate of managing paddy stubble, the Cell will also monitor and coordinate air pollution control measures in identified thermal power plants, particularly focusing on biomass co-firing initiatives.

 

India’s resolution to the Ramsar Contracting Parties on ‘Promoting Sustainable Lifestyles for the Wise Use of Wetlands’, adopted at RamsarCoP15 in Zimbabwe

MoEFCC, vide press release dated July 30, 2025, has announced that at the Ramsar 15^th Conference of Parties being held at Victoria Falls, Zimbabwe, India introduced a resolution on ‘Promoting Sustainable Lifestyles for the Wise Use of Wetlands’. The resolution received overwhelming support from the 172 (one hundred seventy two) Ramsar contracting parties, 6 (six) International organisation partners and other observers and was formally adopted at the plenary session on July 30, 2025. Representing India, the Minister highlighted the country’s significant strides in wetland protection, including the expansion of its Ramsar network by 250% over the past decade.

Among the most notable outcomes was the adoption of a resolution on wetland restoration. Parties committed to developing or improving national legislation and policies for the restoration of degraded freshwater ecosystems, in addition to protection and sustainable management.

 

India’s Mineral Sector to Benefit from the India-UK Comprehensive Economic and Trade Agreement

The Ministry of Mines, vide press release dated August 12, 2025, has outlined the key points addressed in the webinar organised on ‘India-UK Comprehensive Economic and Trade Agreement (“CETA”) and benefits to the Indian mineral sector’. The webinar was held with the objective of bringing together Indian mineral industry to discuss potential benefits and opportunities arising from India-UK CETA. In his address, Secretary (Mines) Shri V L Kantha Rao, highlighted the opportunities for the Indian mineral sector, particularly the aluminium industry, in terms of enhanced market access and competitiveness in the Free Trade Agreement partner country. Towards making good use of the CETA provisions, he emphasised the need to understand product demand in UK through roadshows. He also cited opportunities in research and development collaboration between the 2 (two) countries.

 

Ministry of Coal Successfully Launches the 13^th Round of Commercial Coal Mine Auctions

The Ministry of Coal, vide press release dated August 21, 2025, has announced that it has successfully launched the 13^th round of Commercial Coal Mine Auctions in New Delhi. Shri G. Kishan Reddy highlighted that the coal sector is emerging as a key champion of Atmanirbhar Bharat, with a transparent and inclusive auction system attracting new companies and junior mining firms, providing them fresh opportunities to enter the industry. He further stated that with 134 (one hundred thirty four) mines auctioned across 12 (twelve) rounds, attracting investments worth INR 41,600 crore (Indian Rupees forty one thousand crore) and generating over 3.5 lakh jobs, we are reshaping India’s energy landscape. The 13^th round introduces 14 (fourteen) coal blocks, further reducing reliance on imports and conserving foreign exchange. The transparent auction process has fostered healthy competition, compelling public sector undertakings to innovate and compete with private players, thereby enhancing operational efficiency and global competitiveness.

 

India and Japan Strengthen Energy Cooperation through Ministerial Dialogue

MoP, vide press release dated August 25, 2025, has announced that India and Japan have been deepening their partnership in the energy sector under the Japan-India Clean Energy Partnership, with a focus on energy security, clean energy transition, and addressing climate change. Both sides have institutionalised this cooperation through the India-Japan Energy Dialogue and sectoral Joint Working Groups. A Ministerial-level India-Japan energy dialogue was held through video conferencing, and the Ministers from India and Japan reaffirmed commitment to energy security and inclusive growth and agreed to expand cooperation on carbon capture, utilisation, and storage green chemicals, biofuels, and advanced technologies in energy sector.

 

India and Japan sign Memorandum of Cooperationon Joint Crediting Mechanism under Article6.2 of the Paris Agreement on Climate Change

MoEFCC, vide press release dated August 29, 2025, has announced that India and Japan have signed an Memorandum of Cooperation on Joint Crediting Mechanism (“JCM”) under Article 6.2 of the Paris Agreement of the United Nations Framework Convention on Climate Change. The development demonstrates India’s firm commitment to climate action and marks yet another milestone in the implementation of the Paris Agreement. The JCM will encourage the flow of investment, technology assistance, including technology transfer and capacity building support for the implementation of projects involving these low carbon technologies. It will also develop domestic ecosystem and partnerships to localise low carbon technologies and associated high technology interventions related to equipment, machinery, products, systems and infrastructure, paving the way for their large-scale deployment.

 

This Newsletter has been prepared by:

Amit Kapur Partner

Sugandha Somani Gopal Partner

Vihaan Pathak Associate

 

For more details, please contact [email protected]

 

[1] 2025 INSC 843