Energy Conservation Bill 2022 introduced in Rajya Sabha
Ecology and Environment
16th Dec, 2022
In order to address the transition from fossil fuel to non-fossil fuel capacity in India, the Energy Conservation (Amendment) Bill, 2022 has been introduced in Rajya Sabha.
Key Highlights of the Bill:
- The Bill amends the Energy Conservation Act, 2001to empower the central government to specify a carbon credit trading scheme.
- Designated consumers may be required to meet a proportion of their energy needs from non-fossil sources.
- The Energy Conservation Code for buildings will also apply to office and residential buildings with a connected load of 100 kilowatts or above.
- Energy consumption standards may be specified for vehicles and ships.
Need for the Bill:
- For Action against Climate change: Efforts towards energy conservation and efficiency gains are among the key instruments envisaged for climate change mitigation.
- To reduces, greenhouse gas emissions:Efforts on these fronts lower the energy generation requirement, and thereby reduce greenhouse gas emissions.
- Carbon credit trading: The Bill empowers the central government to specify a carbon credit trading scheme.
- Carbon credit implies a tradeable permit to produce a specified amount of carbon dioxide or other greenhouse emissions.
- The central government or any authorised agency may issue carbon credit certificates to entities registered and compliant with the scheme.
- Obligation to use non-fossil sources of energy: The Act empowers the central government to specify energy consumption standards.
- The Bill adds that the government may require designated consumers to meet a minimum share of energy consumption from non-fossil sources.
- Designated consumers include:
(i) Industries such as mining, steel, cement, textile, chemicals, and petrochemicals,
(ii) Transport sector including Railways, and
(iii) Commercial buildings, as specified in the schedule.
- Energy conservation code for buildings: The Act empowers the central government to specify Energy Conservation Code for buildings.
- The code prescribes energy consumption standards in terms of area.
- The Bill amends this to provide for an ‘Energy Conservation and Sustainable Building Code’.
- Standards for vehicles and vessels:
- Under the Act, energy consumption standards may be specified for equipment and appliances which consume, generate, transmit, or supply energy.
- The Bill expands the scope to include vehicles (as defined under the Motor Vehicles Act, 1988), and vessels (including ships and boats).
- Composition of the governing council of BEE: The Act provides for the setting up of the Bureau of Energy Efficiency (BEE).
- These include:
(i) Secretaries of six departments,
(ii) Representatives of regulatory authorities such as the Central Electricity Authority, the Bureau of Indian Standards, and
(iii) Up to four members representing industries and consumers.
- Lack of proper classification: The Ministry of Power does not have the expertise to regulate carbon trading schemes.
- Lack of Inclusion of market regulators: A further question is whether the market regulator for carbon credit trading should be specified in the Act.
- The flexibility of carbon certificates: The Bill does not specify whether these certificates will be interchangeable.
- Fails to address stakeholders’ needs: Designated consumers must meet certain non-fossil energy use obligations. Given the limited competition among discoms in any area, consumers may not have a choice in the energy mix.