New Energy Conservation Act to Set in Motion Carbon Control Norms
With the passing of the Energy Conservation (Amendment) Bill, 2022, to be made into an Act in both houses of Parliament, India is all set to speed up its carbon emission control plans and bring in radical changes in energy conservation.
Primarily, the bill empowers the central government to create a carbon credit trading mechanism and mandate companies and establishments to earmark a portion of their energy needs from non-fossil sources. The bill will also pave the way for mandating energy consumption standards for vehicles and an Energy Conservation Code for large buildings with a connected load of 100 kilowatt or above.
The Energy Conservation Act of 2001 established the Bureau of Energy Efficiency to recommend regulations and standards for energy consumption and to promote energy efficiency and conservation. The bill was brought in to meet the commitments India made at the COP-26 summit in 2021 - for reducing total projected carbon emissions by one billion tonnes by 2030, reducing the carbon intensity of the economy by 45% by 2030, having 500 GW of non-fossil energy capacity, and meeting 50% of its energy requirements from renewable energy by 2030.
The Act now allows the central government to specify a carbon credit trading scheme or any authorised agency to issue carbon credit certificates to entities registered and compliant with the scheme, which can then be traded.
The bill has provisions to mandate industries such as mining, steel, cement, textiles, chemicals, petrochemicals, and the transport sector, including railways, and commercial buildings, as specified in the schedule, to meet a minimum share of energy consumption from non-fossil sources. Failure to meet this obligation will result in a penalty of up to ten lakh rupees, plus a penalty of up to twice the price of the oil equivalent of the energy consumed above the prescribed limit.
The 'Energy Conservation and Sustainable Building Code' in the bill mandates norms for green commercial buildings. The energy conservation code applies to commercial buildings erected after the notification of the Code and having a minimum connected load of 100 kilowatt (kW) or contract load of 120-kilo volt ampere (kVA). The Code will also apply to office and residential buildings that meet the aforementioned criteria, but state governments will be able to lower the load thresholds.
The bill also brings vehicles and vessels (ships and boats) under the ambit of energy consumption standards. Vehicle manufacturers in violation of fuel consumption norms will be liable to pay a penalty of up to ₹50,000 per unit of vehicles sold. The Act will also pave the way for the setting up of the Bureau of Energy Efficiency (BEE), with a governing council of 20 to 26 members.
Source: Fortune India