Research Note: Environmental Licenses Required by ‘Green’ Category of Industries

1. Introduction of the Concept

 The concept of classification of industrial sectors into red, orange, and green categories
based on the size of operations and consumption of resources was first introduced in 1989
for Doon Valley, Uttarakhand. This classification aimed to aid decisions regarding siting
of industries. Over the period of time, this concept was extended nationwide to manage
consents and establish norms for surveillance and inspection of industry. In 2012, to have
uniformity in classification throughout the country, the Central Pollution Control Board
(CPCB) issued a standardized list of 244 sectors, classified under red (85 sectors), orange
(73 sectors) and green (86 sectors) categories.
 In 2016, the Central Pollution Control Board (CPCB) developed a scoring methodology
based on the Pollution Index (PI) to harmonize the criteria for categorizing industries.
This PI was determined by evaluating water pollution, air pollution, and hazardous waste
generation. Using this methodology, CPCB classified 257 industrial sectors into four
categories: Red (63 sectors), Orange (91 sectors), Green (65 sectors), and White (38
sectors). The White category was introduced for sectors considered "practically non-
polluting" during 2016. Additionally, State Pollution Control Boards (SPCBs) and
Pollution Control Committees (PCCs) were authorized to categorize any new or left over
sectors according to the CPCB's 2016 methodology.
 Considering the scope of revision, CPCB published a draft report revising the
methodology for calculating PI and accordingly classification of sectors into Red,
Orange, Green, and White categories based on pollution index range was placed in the
public domain for inputs/comments. Around 160 representatives comprising more than
700 comments were received. Based on feedback/suggestions and examination of same
by the working committee constituted for the purpose, the methodology was finalised. As
per the final methodology, the scoring criteria for the following three major pollutant
groups are as follows: i. Water Pollutant Score (PIW): Assesses the water pollution
potential considering the oxygen demand of wastewater, other pollutants in the
wastewater and quantity of wastewater generated. ii. Air Pollutant Score (PIA): Evaluates
the potential air pollution due to process emissions (point source), work zone emissions
(fugitive and odour) and type & quantity of fuel used. iii. Waste Pollutant Score (PIH):
Considering the type and quantity of waste (which are hazardous/toxic/infectious/bulk in
nature) generated. Each pollutant group is scored out of 100, and the Cumulative
Pollution Index is calculated. The category of the sector is decided based on the pollution
index range, if PI ≥ 80 the category ii of sector is Red, if PI ranges between 55 ≤ PI < 80,
the category of sector is orange, similarly for the range of PI between 25 ≤ PI < 55, the
category is Green and for PI < 25, the category of the sector is white.
2. Legislations and Rules
 a. Water (Prevention and Control of Pollution) Act, 1974
Section 25: Restrictions on new outlets and new discharges
 Consent Requirement: No person shall establish or operate any industry, process, or
treatment system likely to discharge sewage without prior consent from the State Board.
 Application for Consent: Applications must be in the prescribed form, contain necessary
particulars, and be accompanied by fees.
 State Board Inquiry: The State Board may conduct inquiries and impose conditions on
the consent.
 Conditions and Refusal: The State Board can grant consent with conditions or refuse
consent with recorded reasons.
 Notice for Non-Compliance: If operations commence without consent, the State Board
can impose conditions through a notice.
 Register Maintenance: The State Board must maintain a register of conditions imposed,
open for inspection.
 Deemed Consent: Consent is deemed granted unconditionally if not given or refused
within four months of application.
 Definitions: "New or altered outlet" and "new discharge" are defined for clarity.

b. Air (Prevention and Control of Pollution) Act, 1981

Section 21: Restrictions on use of certain industrial plants
1. Consent Requirement: No person shall establish or operate any industrial plant in an air
pollution control area without prior consent from the State Board.
2. Application for Consent: Applications must be in the prescribed form, contain necessary
particulars, and be accompanied by fees.
3. State Board Inquiry: The State Board may conduct inquiries and impose conditions on
the consent.
4. Conditions and Refusal: The State Board can grant consent with conditions or refuse
consent with recorded reasons.
5. Compliance Conditions: Consent holders must install and maintain control equipment,
erect chimneys, and comply with other specified conditions.
6. Variation of Conditions: The State Board can vary conditions if technological
improvements occur, after giving the consent holder an opportunity to be heard.
7. Transfer of Consent: Consent is deemed granted to any person who acquires the interest
in the industry from the original consent holder.

3. Notifications
  On March 07, 2016, the Central Pollution Control Board (CPCB) issued Modified
Directions 1under Section 18 (b) of the Water Act and the Air Act along with the Final
Report on the Revised Classification of Industrial Sectors into Red, Orange, Green, and
White categories. Due to varying interpretations by State Pollution Control Boards
(SPCBs), there was a need for uniformity in applying these categories across the
country.
 Accordingly, on 04 May, 2016, The Karnataka Pollution Control Board adopted the
revised classifications by issuing a Notification regarding the recategorization. 2
 Then, on February 12, 2025, Directions under Section 18 (1) (b) of the Water Act and the
Air Act regarding harmonization of classification of industrial sectors under Red Orange,
Green White and Blue categories were issued. 3 The SPCBs were required to adopt the
revised classification and comply with the directions before February 20, 2025.

 The revised criteria are based on a Pollution Index (PI), which considers emissions (air
pollutants), effluents (water pollutants), hazardous waste generated, and consumption of
resources. The Pollution Index (PI) ranges from 0 to 100, with higher values indicating a
greater pollution load.

The purpose of classification is to have uniform consent mechanism, defined routine

monitoring frequency by concerned SPCB/PCC, environmental protection plans etc.
Modified methodology also considers the variation in pollution potential due to various
type of activities and operations in a particular sector.

 The categorization is as follows:

Red Category: Pollution Index score of 60 and above.

Orange Category: Pollution Index score between 55 and 80.
Green Category: Pollution Index score between 25 and 55.
White Category: Pollution Index score up to 254

There shall be no necessity of obtaining the Consent to Operate’’ for White category of
industries. An intimation to concerned SPCB / PCC shall suffice.

4. Consent Management for Green Industries

 SPCBs/PCCs may grant Consent to Operate (CTO) to units under red, orange, and
green categories for maximum validity up to 5 years, 10 years, and 15 years,
respectively as per existing provisions which would be later governed as per the

1
[Link] (See Table G-4 for Green Industry and Table G-5 for White Industry)
2
[Link]
3
[Link]
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[Link]
id=TGF0ZXN0RmlsZS9fMTczNzYxMzk2OV9tZWRpYXBob3RvMTEzODMucGRm (Page 3 )
 provisions/guidelines under Jan Vishwas (Amendment of Provisions) Act, 2023/Water
Act, as amended.5
 As per CPCB directions dated 12.12.2019, issued under Section 18(1)(b) of the Water
Act, 1974 and the Air Act, 1981, SPCBs/PCCs are required to ensure inspection of red,
orange, and green category of industries at least once in six-months, one-year, and two
years, respectively.
 Exemptions under Air (Prevention and Control of Pollution) Act, 1981 for White
Category of Industry6:
The Central Government, in consultation with the Central Pollution Control Board
(CPCB), exempts certain categories of industrial plants from the application of sub-
section (1) of section 21 of the Air (Prevention and Control of Pollution) Act, 1981.
 Exemptions apply to:
Industrial plants with a pollution index score up to 20, provided they inform the State
Pollution Control Boards or Pollution Control Committees in writing.
Industrial plants with prior environmental clearance as per the notification dated
September 14, 2006, under the Environment (Protection) Act, 1986

5
[Link] (Page 38)
6
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