Energy Conservation Amendment Bill Passed By RS, Active Carbon Markets A Step Closer

The Energy Conservation (Amendment) Bill has finally been passed by the Rajya Sabha after introduction by MNRE Minister R K Singh. The Bill that was passed in August 2022 in the Lok Sabha, seeks to amend the Electricity Conservation Act 2001. The new law paves the way for amendments such as issuing carbon saving certificates in order to incentivise the use of clean energy.

The law seeks to mandate the designated use of non-fossil sources of energy and proposes a new building code applicable for office as well as residential buildings that have a connected load of 100 kW or more. It also looks to give a push to green hydrogen, biomass, ammonia, ethanol and green energy. The law also includes in its ambit vehicles and vessels and has provisions for imposing penalties in case of violations by industries and manufacturers, which do not toe the line with regards to fuel consumption norms.

Controversy’s Child

Right from the word go, the Bill has been in the eye of the storm. It was no surprise, therefore, that the Bill invited critique in the Rajya Sabha too.

The law, which, empowers the central government to lay down standards with regards to energy consumption, has been the bone of contention for the longest time. On Monday, when introduced in the Rajya Sabha, the Bill was attacked on several grounds. To begin with, the members from the Opposition said that it infringes upon the jurisdiction of the Environment Ministry. It was also pointed out that the legislation should have been introduced following consultation with Parliamentary standing committee.

P Wilson from the DMK questioned why the Ministry of Power has been made the nodal agency when the Bill looks into matters related to the environment. He claimed that these should fall under the purview of the Ministry of Environment, Forest and Climate Change. A visibly upset Wilson further criticised the fact that the Bill acts “without jurisdiction” and is “usurping” the power of the said ministries and comes with “legal infirmities”.

As the Bill reached the Rajya Sabha, the MNRE Minister termed it “futuristic”. Further, it was pointed out that the Bill failed to answer the question as to who will issue the carbon certificated and who will regulate them.

However, most of the criticism seems unfair, as the bill focuses on energy use with green energy primarily, to achieve higher electrification of the economy. The Ministry of Power/MNRE would seem to be the right one to helm this.

The activities linked to the bill, namely the creation of a carbon market and mandatory use of renewable energy by industry, besides energy conservation standards for vehicles and vessels will all have potentially profound impact on India’s long term carbon (emissions reduction) goals.