The Energy Conservation (Amendment) Bill has been introduced in the Rajya Sabha by the Ministry of New and Renewable Energy.
Highlights
- By amending the Energy Conservation Act of 2001, the Bill gives the federal government more authority to designate a carbon credit trading system.
- A percentage of the energy demands of designated users may need to come from non-fossil fuels.
Why did this Bill get started?
- India made promises pertinent to efforts to increase energy efficiency at the COP-26 meeting in 2021.
- In light of this, in August 2022, the Energy Conservation (Amendment) Bill, 2022 was presented to Lok Sabha.
Key features
- Trading in carbon credits: The Bill gives the federal government the authority to designate a system for trading in carbon credits. A tradable permit to emit a certain amount of carbon dioxide or other greenhouse gases is implied by a carbon credit.
- Use of non-fossil energy sources is required by law, and the Act gives the government the authority to set minimum non-fossil energy consumption standards for designated consumers. Industries like mining, steel, cement, textile, chemicals, and petrochemicals are designated consumers, as are the transportation sector, including railroads, and commercial buildings, as listed in the schedule.
- The measure gives the central government the authority to define standards for energy efficiency and conservation, the use of renewable energy sources, and other specifications for green buildings. According to the Act, commercial buildings that were built after the Code’s announcement and that had a minimum connected load of 100 kW or contract load of 120 kilovolt ampere were subject to the energy conservation code (kVA).
- Criteria for cars and vessels: The law allows for the specification of energy consumption standards for machinery and appliances that use, produce, transfer, or supply energy. The Motor Vehicles Act of 1988’s definition of a vehicle and a vessel are included in the Bill’s expanded definition (includes ships and boats).
- Members of the BEE’s governing council include: The Bureau of Energy Efficiency will be created under the Act (BEE). The Bureau’s executive committee consists of 20 to 26 people.
Matters raised
- Trading carbon credits attempts to lower carbon emissions and thereby combat climate change. If the Ministry of Power should oversee this scheme’s regulation, that is the question.
- Another concern is whether the Act should designate the market regulator for the trading of carbon credits.
- The same activity may qualify for certifications for renewable energy, energy efficiency, and carbon credit.
- The interchangeability of these certificates is not stated in the Bill.
- Customers who are designated must adhere to particular non-fossil energy use requirements. It’s possible that consumers won’t have a choice in the energy mix due to the lack of competition among discoms in any given area.