The Ministry of Power has recently introduced the Energy Conservation (Amendment) Bill 2022 in the Lok Sabha. This new Bill intends to amend the Energy Conservation Act 2001, last modified in 2010, with the aim of incentivising clean energy adoption through the issuance of carbon saving certificates.
Provisions of the Energy Conservation Act 2001
The Energy Conservation Act 2001 empowers the Central Government to stipulate energy efficiency standards for appliances, industrial equipment, and buildings consuming over 100 kilowatts or contractually demanding more than 120 kilovolt-amperes. The same Act established the Bureau of Energy Efficiency (BEE), which oversees energy consumption across various industries and mandates required qualifications for energy auditors.
Additionally, the Act allows the Government to issue energy savings certificates to industries consuming less than their allotted energy. It also provides a framework for energy trading, delivering penalties for excess consumption, and prohibiting the manufacture, sale, purchase, or import of equipment that fails to meet specified norms.
Proposed Amendments in the Energy Conservation Act 2001
The Energy Conservation (Amendment) Bill 2022 seeks to define the minimum share of renewable energy consumed by industrial units or establishments. It introduces incentives for using clean energy—like issuing carbon saving certificates—and proposes additional rewards like carbon credits to encourage private sector involvement in climate action.
Among other things, the proposed amendments aim to strengthen institutions such as the Bureau of Energy Efficiency, promote Green Hydrogen as a fossil fuel alternative, and expand energy conservation standards to larger residential buildings.
Objectives of the Proposed Amendments
The proposed amendments primarily aim to reduce India’s carbon footprint by minimising fossil fuel-based power consumption. They also aim to develop India’s Carbon market, stimulate clean technology adoption, and enable India to attain its Nationally Determined Contributions (NDCs) before the 2030 deadline under the Paris Climate Agreement.
India’s Climate Change Commitments
Under the Paris Climate Agreement, India has pledged to reduce the carbon intensity of its economy by 33-35% by 2030 from 2005 levels. It has also committed to achieving over 40% of its power generation from non-fossil-fuel energy resources by 2030 and reducing its CO2 emissions to 550 metric tonnes by the same year.
At COP26 Summit held in Glasgow in November 2021, India revised its NDCs, announcing five new climate targets, including increasing non-fossil energy capacity and reducing the projected total carbon emissions by one billion tonnes from 2021 to 2030. The country also aims to achieve net-zero carbon emissions by 2070.
Measures to Reduce India’s Carbon Footprint
The Indian Government has launched several measures to reduce the country’s carbon footprint. In Budget 2022-23, a substantial allocation was made to encourage domestic solar manufacturing in India. Furthermore, measures such as biomass co-firing in thermal power plants, the imposition of differential excise duty on unblended fuel, formulation of a new battery swapping policy for electric vehicles, and the issuance of ‘Green Bonds’ for funding environmentally positive projects have been proposed.