Environmental Clearance vs Consent to Establish: Two Gates before a Project Begins

Before a new factory, mine, power plant or township can be built in India, it usually needs approvals under two different environmental regimes. Environmental clearance (EC) under the EIA Notification, 2006 asks whether the project as a whole is environmentally acceptable at that location, after an impact assessment and public consultation. Consent to establish (CTE) under the Water and Air Acts asks whether the industrial unit has adequate arrangements to control its effluents and emissions. Since November 2024, industries that obtain EC no longer need a separate CTE, but the two remain conceptually distinct and are a favourite examination comparison.

1. Environmental Clearance

Environmental clearance is the prior approval required under the EIA Notification, 2006, issued under Section 3 of the Environment (Protection) Act, 1986 and Rule 5(3) of the EP Rules, before any construction work or preparation of land (other than securing the land) is started for a project listed in the Schedule (mining, thermal power, river valley, industries, infrastructure, building and area development, and others), and for their expansion or modernisation. Projects are Category A (appraised by the Expert Appraisal Committee and cleared by the MoEFCC) or Category B (appraised by the SEAC and cleared by the SEIAA). The process has four stages: screening (for Category B), scoping (terms of reference), public consultation and appraisal. The EC contains general and specific conditions and is monitored by the Ministry's regional offices through six-monthly compliance reports. Under the amendment of April 2022, an EC is generally valid for ten years (thirteen for river valley, fifteen for nuclear, and up to thirty for mining projects).

2. Consent to Establish

Consent to establish is the permission of the State Pollution Control Board required under Section 25 of the Water Act, 1974 (to establish any industry, operation or process, or treatment and disposal system, likely to discharge sewage or trade effluent) and Section 21 of the Air Act, 1981 (to establish any industrial plant in an air pollution control area). It is sought before the unit is established and examines the location, the process, the quantity and characteristics of effluents and emissions, the proposed treatment and control systems, stack heights and waste management. Industries are categorised as red, orange, green or white according to pollution potential. The Board must decide within four months, failing which consent is deemed to have been granted (Section 25(7), Water Act).

By notifications of 14 November 2024 under the Water and Air Acts, the Central Government exempted white category industries from CTE and CTO, and provided that industries that have obtained EC need not obtain a separate CTE. The State Board is consulted during the EC process, the matters formerly examined at the CTE stage are incorporated into EC appraisal under a standard operating procedure, and the CTE fee remains payable to the State. Civil society groups criticised the change as reducing the State Boards' role.

3. Key Differences

4. Legal Significance and Case Law

• Prior EC is mandatory: in Common Cause v. Union of India, (2017) 9 SCC 499, mining without or beyond EC was treated as mining without lawful authority; in Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC 157, the Supreme Court held that ex post facto ECs are alien to environmental law, though it imposed compensation rather than closure; and in Vanashakti (July 2026) it upheld the 2017 one-time amnesty notification but quashed the 2021 office memorandum on post-facto clearances prospectively;
• the EC process must be meaningful: Lafarge Umiam Mining v. Union of India, (2011) 7 SCC 338, and Hanuman Laxman Aroskar v. Union of India, (2019) 15 SCC 401, require proper appraisal and reasons; and
• consent conditions are enforceable through closure: Paryavaran Suraksha Samiti v. Union of India, (2017) 5 SCC 326, directed that industries without functional effluent treatment plants must not operate.

5. Related Topics and Provisions