04 Sep 2025
This update highlights key regulatory, judicial and policy developments in Indian environmental law from August 2025.
Partner: Rajat Jariwal, Senior Associate: Gaurav Sharma, Associates: Anushka Awasthi, Akanksha Wadhawan and Dev Chand
The month of August 2025 witnessed several developments shaping India’s environmental governance framework across regulatory, judicial and policy landscapes. At the regulatory level, the Central Pollution Control Board (CPCB) released a draft methodology on Environmental Damage Cost Assessment (EDCA), proposing a standardised framework to calculate environmental compensation. It also issued comprehensive technical guidelines for the operation and maintenance of municipal solid waste incineration-based Waste-to-Energy (WtE) plants.
State Pollution Control Boards also introduced significant reforms. The Maharashtra Pollution Control Board (MPCB) extended auto-renewal of consents across industry categories, streamlining compliance procedures. Meanwhile, the Assam Pollution Control Board (PCBA) issued additional compliance directives for industries operating in the Byrnihat Critically Polluted Area.
On the judicial front, the Supreme Court affirmed the authority of State Pollution Control Boards (SPCB) to impose compensatory damages under the Water and Air Acts. The Court also clarified the applicability of the Environmental Impact Assessment Notification 2006 (EIA Notification) to industrial sheds, educational institutions, and hostels. In parallel, the National Green Tribunal (NGT) upheld the validity of environmental clearances (EC) issued to certain projects in Maharashtra, while mandating stricter timelines for decision-making by the State Environment Impact Assessment Authorities (SEIAA).
From a policy standpoint, the Ministry of Environment, Forest and Climate Change (MoEF&CC) advanced India’s commitments under the Paris Agreement. It constituted the National Designated Authority (NDA) for the implementation of Article 6, which provides for the establishment of a mechanism for mitigating greenhouse gas emissions and supporting sustainable development, and operationalised the Green Credit Rules, 2023 by notifying a methodology for calculating credits from tree plantation activities.
These key developments are discussed in detail below.
On 6 August 2025, the CPCB released its draft report on EDCA,1 proposing methodologies to assess compensatory damages for environmental infringements. This move follows the National Green Tribunal’s (NGT) order in Jammula Choudharaiah & Anr. v Union of India directing the establishment of a formal and uniform mechanism for determining environmental compensation to remove any subjectivity or ambiguity in its computation. The draft report invited comments from stakeholders until 17 August 2025, and once notified, the finalised methodology will acquire statutory status.
The draft report classifies non-compliances into four broad categories for the purpose of computation of environmental compensation:
The draft report also provides a methodology for calculating fixed penalty costs, developed in line with the CPCB’s in-house committee report on assessment of environmental compensation. The computation considers the pollution potential of the violator, the extent of exposure to population, the operational scale of the project or activity, and the potential for ecological damage. These costs are proposed to range from INR 10,000 to a maximum of INR 15,00,000 for each contravention.
Acknowledging the critical role of WtE plants in managing municipal solid wastes (MSW), the CPCB on 18 August 2025 issued guidelines on MSW incineration-based WtE plants. These guidelines apply to all WtE plants and aim to identify key waste streams generated from such plants and prescribe mitigation and control measures for their effective management.
Serving as a blueprint for all project proponents, regulators and plant operators, the guidelines provide technical guidance on various operational aspects. These include the characteristics of feedstock suitable for incineration, requirements for pre-treatment and segregation, process design and technology configuration for thermal treatment, ash handling and emissions control, and leachate management.
These guidelines are intended to support WtE units in ensuring compliance with the Solid Waste Management Rules, 2016, and promote environmentally sound and sustainable waste processing practices.
On 13 August 2025, the MPCB issued a circular extending the simplified auto-renewal scheme for Consents to Operate (CTO) to all categories of industries that do not require an EC under the EIA Notification.2 Under the extended scheme, eligible industries can obtain auto-renewal of their CTOs by submitting a self-declaration along with the renewal application. This declaration must confirm continued compliance with all conditions specified in the original CTO, as well as any additional conditions imposed subsequently.
The auto-renewal facility is available as follows:
However, this scheme is conditional upon there being no increase in the overall production capacity and pollution load, and any increase in capital investment being limited to 30%.
All auto-renewals undertaken through the scheme will be reflected on the MPCB’s website within seven days from the date of submission of the CTO-renewal application.
On 23 August 2025, the PCBA issued a circular mandating additional compliance measures for industries located and operating in the Byrnihat Critically Polluted Area.3 These measures are aimed at enhancing dust suppression and controlling fugitive emissions, and are to be implemented in addition to the existing conditions prescribed in the CTO granted to each industrial unit.
This circular is in continuation of the Comprehensive Environmental Pollution Abatement Action Plan formulated by the PCBA for the Byrnihat industrial cluster. It introduces industry-specific and category-specific compliance requirements intended to reduce the concentration of particulate matter in the region.
Key directives include:
Industries in the area are also mandated to submit quarterly action-taken reports to the PCBA detailing compliance with the prescribed directives.
On 4 August 2025, the Supreme Court, in Delhi Pollution Control Committee v Lodhi Property Co. Ltd., upheld the SPCBs’ powers under Section 33A of the Water Prevention and Control of Pollution) Act, 1974 (Water Act), and Section 31A of the Air (Prevention and Control of Pollution) Act, 1981 (Air Act), to recover restitutionary and compensatory damages against environmental harm.
The appeal arose from a Delhi High Court ruling that the Delhi Pollution Control Committee lacked authority to levy compensatory damages under the Water and Air Acts. Reversing this view, the Supreme Court held that a restrictive interpretation, which fails to distinguish between environmental damages and punitive action, would impede the statutory mandate of environmental regulators. However, while upholding the powers of SPCBs, the Court ordered that no consequential directions be issued to revive the specific show cause notices in the case and directed the return of any amounts already recovered.
Key aspects of the Supreme Court’s ruling are:
In a significant ruling, the Supreme Court partially struck down the 29 January 2025 notification issued by the MoEF&CC which sought to exempt industrial sheds, schools, colleges, and hostels from the applicability of the EIA Notification under Entry 8(a) of its Schedule.
The petition challenged both the 2025 Notification and the clarificatory Office Memorandum dated 30 January 2025, arguing that these instruments diluted the environmental safeguards under the EIA regime.
Key findings of the Division Bench of the Supreme Court include:
In conclusion, while the overall validity of the 2025 Notification was upheld, the blanket exemption granted to certain categories of construction was struck down.
The Western Zone of the NGT disposed of a batch of appeals challenging the validity of ECs granted to certain projects by the SEIAA, Maharashtra. The primary ground of challenge was that the ECs were communicated to project proponents after the expiry of SEIAA’s tenure, as notified by the MoEF&CC on 11 January 2021, rendering them without legal authority.
The Tribunal held that while the communication of the approvals occurred after SEIAA’s tenure had ended, the decisions to grant ECs were made during its valid term. As such, the clearances were found to be legally valid.
While dismissing the appeals, the NGT took note of undue delays in the SEIAA’s communication process and laid down mandatory timelines for future proceedings:
On 22 August 2025, the MoEF&CC formally constituted the NDA for the implementation of Article 6 of the Paris Agreement, reinforcing India’s commitment to its Nationally Determined Contributions (NDC).
This step aligns with decisions adopted during the third meeting of the Conference of the Parties to the Paris Agreement (CMA-3) and is aimed at operationalising the international market mechanisms envisaged under Article 6, to facilitate both greenhouse gas (GHG) mitigation and sustainable development.
The newly established NDA has been empowered to undertake host Party responsibilities, including the evaluation, approval, and authorisation of projects at various stages of the project cycle under Article 6.2 (bilateral cooperation mechanisms and robust accounting) and Article 6.4 (centralised UN mechanism). It is also empowered to authorise the use of emission reduction units from approved projects for meeting India’s NDC targets and other international mitigation commitments.
On 29 August 2025, the MoEF&CC notified the methodology for calculating Green Credits under Rule 4 of the Green Credit Rules, 2023, specifically for tree plantation activities.
Under the methodology, applicants may claim Green Credits after completing a minimum of five years of restoration on degraded forest land parcels, provided a canopy density of at least 40% is achieved. Each qualifying tree (meeting the age and density criteria) will be eligible for one Green Credit.
The notification also introduces a credit-exchange mechanism, allowing each Green Credit to be exchanged once for the following purposes:
This move operationalises a key component of the Green-Credit Programme, aimed at incentivising sustainable afforestation and ecological restoration efforts.
[1] https://cpcb.nic.in/openpdffile.php?bGVzLzExN18xNzU0NDgzNjk5X21lZGlhcGhvdG8xODc5NS5wZGY=
[2] https://mpcb.gov.in/sites/default/files/standing_orders/Simplifiedschemeofauto-entsbasedonSelf.pdf
[3] https://www.pcbassam.org/Notice/Circular_fugitive_info.pdf
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