The Rajya Sabha has passed the Energy Conservation (Amendment) Bill, 2022, paving the way for renewable energy uptake and adoption of energy efficiency measures across industrial, commercial and large residential consumer categories, and introducing carbon credit markets in the country.
The key provisions of the new bill include mandating the consumption of non-fossil fuel sources, including green hydrogen, green ammonia, biomass and ethanol for energy and feedstock by designated consumers; proposing the introduction of carbon credit markets; bringing large residential buildings within the energy conservation regime; and prescribing strict penalties.
The Energy Conservation (Amendment) Bill, 2022 is expected to take the country’s energy conservation measures up several notches. The legal provisions, prescribing a minimum consumption of non-fossil fuel sources as energy or feedstock by designated consumers, are likely to aid in the reduction of fossil fuel-based energy consumption and the resultant carbon emissions. Besides, a carbon credit market will go a long way in incentivising actions for emission reduction, leading to increased investments in clean energy and energy efficiency. The bill is expected to give a fillip to India’s decarbonisation efforts and ambitious targets.
While carbon trading has been introduced in the bill, the industry is eagerly awaiting the blueprint of the framework to operationalise this market in the country. Besides this, a robust system for monitoring, reporting and verification of carbon emission reductions will be paramount for successful and transparent market operations. The roll-out of the carbon credit market and the details of its implementation will be watched closely in the coming months.