Both houses of the
The principal legislation, Energy Conservation Act, 2001, was introduced for regulating energy consumption and encouraging energy efficiency and conservation through measures like establishing
We have mentioned below some of the key provisions introduced through this amendment:
a. Mandated use of non-fossil sources by certain entities
The amendment mandates that 'designated consumers' of energy will be required to meet a specific portion of their energy demands from non-fossil sources. Government may also specify different consumption share for different types of non-fossil sources for different designated consumers. Designated consumers currently include specific kinds of industries, transport and commercial buildings.
b. Carbon credit certificates trading scheme
The amendment empowers Union Government to initiate carbon trading scheme to encourage reduction of carbon emissions in the economy. While carbon credit is not defined in the amendment, it is generally considered as a credit provided to an entity for reducing or avoiding specified amount of carbon emissions from its activities. Registered entities will be issued carbon credit certificate by
Mr. RK Singh, Minister of New and Renewable Energy, stated in the Rajya Sabha that
c. Energy conservation code for large buildings
Mr. RK Singh also stated in the Rajya Sabha that roughly 24% of
d. Energy consumption standards for vehicles
The principal legislation allows the government to specify energy consumption standards for equipment and appliances. For instance,
e.
The amendment requires State Governments to constitute energy conservation funds for the promotion of energy efficiency and conservation measures. This fund shall inter alia receive contribution from loans and grants provided by the Union Government and all fees received by the State Government under the principal statute.
This amendment seeks to consolidate multiple sources/aspects related to energy transition, efficiency and conservation under one legislation to avoid overlap and confusion between multiple legislations. It introduces initiatives which are necessary for energy transition and conservation. However, several concerns are being raised by policy experts regarding the scope of this amendment and the implementation challenges for stakeholders including the industry.4 For instance, industries may not be able to meet the minimum requirements to source their energy needs from non-fossil sources as they may not have control over the source from which power is supplied to them by the power distribution agency. Similarly, there might also be issues related to overlap between the existing policies - Energy Saving Certificates, Renewable Energy Saving Certificates and the new policy - carbon credit certificates trading. It is expected that these aspects and the implementation challenges would be addressed in the near future.
Footnotes
1. https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1847812.
2. https://pib.gov.in/PressReleseDetail.aspx?PRID=1768712.
3. https://prsindia.org/billtrack/prs-products/prs-legislative-brief-4002.
4. https://prsindia.org/billtrack/prs-products/prs-bill-summary-3977
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