Energy Conservation (Amendment) Bill

In Context

• Recently, the Lok Sabha passed the Energy Conservation (Amendment) Bill, 2022.
  •  The Bill seeks to amend the Energy Conservation Act, 2001.   

More about the news

• The Energy Conservation Act, 2001 promotes energy efficiency and conservation.  
  • It provides for the regulation of energy consumption by equipment, appliances, buildings, and industries.
• Key provisions of the Energy Conservation (Amendment) Bill:
  • The bill seeks to mandate the use of non-fossil sources, including Green hydrogen, green ammonia, biomass, and Ethanol for energy and feedstock; 

• Establish Carbon Markets; 
• Bring large residential buildings within the fold of the Energy Conservation regime; 
• Enhance the scope of the Energy Conservation Building Code; 
• Amend penalty provisions; 
• Increase members in the governing council of the Bureau of Energy Efficiency (BEE); 
• Empower the State Electricity Regulatory Commissions  to make regulations for smooth discharge of its functions 
• To put in place enabling provisions to make the use of clean energy, including green hydrogen, mandatory and to establish carbon markets.

Significance

• Climate Change & Paris Agreement:
  • Climate change has become a reality and governments across the world are making stronger commitments towards climate action to avert the crisis. 
  • India made a commitment as a part of the Paris Agreement, which is a legally binding international treaty on climate change.
  • Updated NDCs:
    • According to the recently updated  Nationally Determined Contribution (NDC), 
      • India now aims to reduce emissions intensity of its GDP by 45 percent by 2030 from 2005 levels, and 
      • Source 50 percent of electricity from non-fossil sources.  
    • The new Bill is in line with the country’s commitments and will act as a facilitator for achieving the targets.
• Carbon Market:
  • The Bill empowers the central government to specify a carbon credit trading scheme.
  • The proposed amendments aim to encourage the development of a carbon market by laying the framework for issuance of carbon credits against deployment of clean technology. 
    • Investment in clean technology will help corporations in greening their business profiles and the attached carbon credits will provide an additional revenue stream. 
  • Hence, the proposed amendments seek to address a prominent gap in the climate change narrative with respect to involvement of the private sector.

Way ahead

• India needs to align public financial flows with announced targets on energy transition, to leverage private finance. This includes 
  • Shifting subsidies to clean energy, 
  • Mandating SOE (state-owned enterprises) investments in clean energy and Increasing targets on public finance for clean energy. 
• With an upcoming COP and a G20 summit in India next year, these actions can strengthen India’s negotiating power, especially around climate finance from the global north.

Source: TH