The Energy Conservation (Amendment) Bill, 2022 was passed on the 3rd of August’22. The passage of the Energy Conservation (Amendment) Bill, 2022 by the Lok Sabha is a significant step toward reaching India’s climate targets. The bill is projected to contribute significantly to India’s NDCs, which are the country’s pledges to support environmental measures as per the Paris Agreement. The bill aims to mandate the use of non-fossil sources of energy and feedstock, such as green hydrogen, green ammonia, biomass, and ethanol; create Carbon Markets; bring large residential buildings under the Energy Conservation regime; expand the range of the Energy Conservation Building Code; modify penalty provisions; increase members on the Bureau of Energy Efficiency’s governing council, and empower State Electricity Regulatory Commissions. In its proposal, the Union government stated that a legal system for an energy market was required to accomplish the goal of incentivizing emission reduction activities, resulting in higher private sector investments in renewable energy. The objectives of the bill include:
- Lower India’s reliance on fossil fuels in order to reduce the country’s carbon footprint.
- To expand India’s carbon market and promote the use of clean technology.
- To satisfy its Nationally Determined Contribution (NDCs), as outlined in the Paris Climate Agreement, by 2030.
The reasons for passing the bill are as follows:
- In fulfillment of its NDCs as per the Paris Climate Agreement, India has pledged to decrease its economy’s carbon intensity by 33-35% by 2030 compared to 2005 levels.
- India has also pledged to generate more than 40% of its power from non-fossil fuel sources by 2030.
- India has promised to develop an additional carbon drain for 3 billion tons of Carbon dioxide by expanding its plant and forest cover in order to lower its Carbon footprints to 550 metric tons by 2030.
- To meet the COP26 summit’s put in commitments in 2021.
- To boost non-fossil generating capacity to 500 GW by 2030.
- Using renewable energy sources to meet 50% of India’s power requirement.
- To reduce the Indian economy’s carbon intensity by 45%.
- From 2021 to 2030, India’s total anticipated carbon emissions should be reduced by one billion tonnes.
- To reach a net zero (carbon emissions) target by 2070.
AMENDMENTS TO THE BILL
The amendments brought about the aim to increase the amount of renewable energy while also penalizing industrial offenders for carbon emissions. The bill’s provisions will aid in increasing renewable energy usage and will have an economic impact. Using the legislation to set strong industrial targets and standards in the future could help India achieve its developmental, energy, and climatic goals. Following is the list of amendments that the law brought about:
- To oblige by the use of non-fossil fuel sources of energy: The Act gives the central government the authority to set energy usage requirements. The Bill also stipulates that the government can mandate designated users to fulfil a certain percentage of their energy usage from non-fossil sources. Such users in particular include industries (chemical, mining, petrochemicals, coal, etc.), commercial buildings, and the transport sector. Any violation of the order so passed shall attract a penalty up to rupees ten lakhs.
- Carbon Trading: The bill gives the federal government the authority to design a carbon credit trading program. A program that denotes a tradable permit to emit a certain amount of carbon dioxide. Carbon credit certificates may be issued by the central government or even any authorized agency to entities that have registered for and are following the scheme. The entities will be able to buy and sell the certificate.
- Energy conservation for buildings: The code specifies energy usage norms in terms of surface. The Bill amends this to include an ‘energy conservation and environmentally friendly building code.’ This new code will establish standards for energy savings and conservation, the use of renewable power, and some other criteria for green buildings.
- Composition of the governing council of BEE: The Bureau is governed by a governing council of 20 to 26 members. These include secretaries from six departments, representatives from regulatory bodies such as the Central Electricity Authority and the Bureau of Indian Standards, and a maximum of four members representing industry and consumers. Instead, the Bill specifies that the number of lawmakers will range from 31 to 37. It raises the total number of secretaries to twelve. It also allows for up to seven representatives from industries and consumers.
- SERC’s powers are regulated: The Act authorizes State Electricity Regulatory Commissions (SERCs) to adjudicate fines under the Act. The Bill also states that SERCs may issue regulations to carry out their duties.
- Vehicle and vessel energy consumption standards: The Act allows for the specification of energy consumption standards for equipment and appliances that consume, create, transfer, or supply energy. Vehicle makers that violate fuel consumption standards may face a fine equivalent to Rs. 50,000 for every unit sold.
- Applicability to residential structures: According to the Amendment, the energy saving code pertains to commercial buildings that are erected after the code’s notice, and have a basic connected load of 100 kilowatts (kW) or contractual load of 120-kilovolt amperes (kVA).
The first amendment protections would have the greatest impact on India’s industrial sector. The government’s decision to finally implement non-fossil energy targets in sector is a good one. However, it is not a new phenomenon, as several major industries have previously made significant investments in converting to renewable energy. Some of the biggest issues include the periodicity of renewables (particularly solar and wind), which means that the peak time of generation may not coincide with the peak time of demand in industries. This leads to a second issue of not possessing enough affordable storage technology to balance demand and supply for all sorts of industries, particularly those that operate continuously. The changes call for the use of renewable fuels such as green hydrogen and green ammonia. So, the targets for the use of these gases in various areas may be established. However, before setting targets for such fuels in businesses, the government must allow certain profitable study and development and experiments on the ground. This will provide an accurate view of the technical and financial viability. The legislation aims to accelerate the green transformation by allowing the government jurisdiction over energy consumption. Article 6 of the Paris Deal, a legally enforceable global climate change agreement, also establishes a solid foundation for the implementation of international carbon markets to decrease global greenhouse gas emissions whilst guaranteeing transparency and accountability. The Bill expands the range of energy conservation standards for buildings while narrowing the scope of energy efficiency standards for devices and appliances. It creates a framework inside which energy savings can be transferred between enterprises that are fuel efficient versus those whose energy usage exceeds the government’s maximum.
Union Power Minister K Singh introduced the bill in the lower chamber of Parliament. While seeking House support, Power Minister referred to the Energy Conservation Amendment Bill as “the legislation for the future.” The bill’s suggested revisions are said to increase India’s commitment to climate change. The primary goal of the Energy Conservation (Amendment) Bill 2022 is to lessen the country’s reliance on fossil fuel generation. The secondary goal is to build India’s carbon market in order to facilitate trading and encourage the use of sustainable technology and energy efficiency improvements. To escape an environmental disaster, governments around the world are increasing their commitments to climate action.
This article is written by Shraddha Vemula, a second-year B.B.A. LLB student at Symbiosis Law School, Hyderabad.