New Color Code for Industries in India

In February 2016, the Ministry of Environment, Forest and Climate Change (MoEFCC) unveiled a new categorization of industries based on their pollution load. The new classification is for entire industrial sectors and not for individual units.

Pollution Index

Pollution Index forms the criteria for categorization of industrial sectors. Pollution Index is a function of emissions (air pollutants), effluents (water pollutants), hazardous wastes generated and consumption of resources. PI is a number from 0 to 100. If the value of PI is higher, it denotes higher degree of pollution load from that industrial sector.

The references for calculating PI has been taken from:

• Water (Prevention and Control of Pollution ) Cess (Amendment) Act, 2003,
• Standards mentioned for various pollutants under Environment (Protection) Act , 1986,
• Doon Valley Notification, 1989

New categories of industries based on PI:

• Industrial sectors with PI of 60 and above are placed under Red category.
• Industrial sectors with PI of 41 to 59 are placed under Orange category.
• Industrial sectors with PI of 21 to 40 are placed under Green category.
• Industrial sectors with PI of incl. and up to 20 are placed under White category.

Purpose of re-categorization of industries

The main purpose of re-categorization of industries is to make sure that the industries are established in a manner which is consistent with environmental objectives. The re-categorization will encourage industries to adopt cleaner technologies resulting in the generation of fewer pollutants.

Also, the old system of categorization was creating problems as it was not reflecting the pollution level of the industries. Further, 25 industrial sectors which were not critically polluting were categorized as Red. Lastly, the re-categorisation of industries will help to create a clean and transparent working environment in the country and promote Ease of Doing Business.

Salient features of new System

• In this Re-categorization, relative pollution potential of the industrial sectors based on scientific criteria have been given due importance.
• Based on the raw materials, manufacturing process adopted and pollutants generated out of them, the industrial sectors are further split wherever possible.
• Red category of industrial sectors would be 60. These industries will not be permitted in ecologically fragile and protected areas. Examples include Petrochemicals, pharmaceuticals, sugar, paper and pulp, nuclear power plants, organic chemicals, fertilizers, fire crackers etc.
• Orange category of industrial sectors would be 83. Examples are coal washeries, glass manufacturing, paints, stone crushers, and aluminum and copper extraction from scrap.
• Green category of industrial sectors would be 63. Examples include aluminum utensils, steel furniture, soap manufacturing and tea processing.
• Newly introduced White category industrial sectors which are non-polluting would be 36. White categories of industries need not obtain consent to operate. It would be suffice if such industries intimate State pollution Control Board (SPCB) or Pollution Control committee (PCC).

White category industries

The White category of industries is practically non-polluting industries and has been newly introduced in to the categorization of industries. Some examples of this category of industries are scientific and mathematical instruments manufacturing, solar power generation through photovoltaic cell, wind power, mini hydel power plants generating less than 25 MW, electric lamp and CFL manufacturing only by assembling, making of cotton and wooden hosiers without any dying/washing operation, biscuit tray units etc. These industries will not need a green clearance and this will help in getting easy finance from the lending institutions.