Relevance: GS-2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Key Phrases: Energy Conservation Act, 2001, Energy Conservation (Amendment) Bill, 2022, Carbon trading, Sustainable development goals, Paris Agreement, Non-fossil sources, Designated consumers, Energy conservation code for buildings, Standards for vehicles and vessels, Motor Vehicles Act, 1988, State Electricity Regulatory Commissions, Carbon markets, Kyoto Protocol, Emissions trading, Joint Implementation.

Context:

• The Lok Sabha has passed the Bill to amend the Energy Conservation Act, 2001, to reduce fossil fuel-based energy consumption and resultant carbon emissions to the atmosphere.

Energy Conservation (Amendment) Bill, 2022:

• Union Power Minister introduced the Energy Conservation (Amendment) Bill 2022 in Lok Sabha on August 3, 2022. The bill seeks to amend the Energy Conservation Act, 2001.
• The lower house of the parliament on August 8 passed the Energy Conservation (Amendment) Bill, 2022.
• The bill will now have to be passed by Rajya Sabha.
• Now that the parliament has been adjourned sine die four days ahead of schedule, the bill will be taken in the Rajya Sabha in the winter session.

Why there was a need to amend the Energy Conservation Act, 2001?

• To introduce new concepts such as Carbon trading and mandate the use of non-fossil sources to ensure faster decarbonization of the Indian economy.
• To help in achieving sustainable development goals in line with the Paris Agreement and various other actions related to climate change.
• To provide a legal framework for a carbon market with the objective of incentivizing actions for emission reduction leading to increased investments in clean energy and energy efficiency areas by the private sector.

Key proposals:

• Obligation to use non-fossil sources of energy:
  • The Bill empowers the central government to specify energy consumption standards.
  • The Bill adds that the government may require the designated consumers to meet a minimum share of energy consumption from non-fossil sources.
  • Different consumption thresholds may be specified for different non-fossil sources and consumer categories.
  • Designated consumers include:
    • Industries such as mining, steel, cement, textile, chemicals, and petrochemicals,
    • Transport sector including Railways,
    • Commercial buildings, as specified in the schedule.
  • Failure to meet the obligation for use of energy from non-fossil sources will be punishable with a penalty of up to Rs 10 lakh.
• Carbon trading:
  • The Bill empowers the central government to specify a carbon credit trading scheme.
  • The central government or any authorised agency may issue carbon credit certificates to entities registered under and compliant with the scheme.
  • The entities will be entitled to purchase or sell the certificate. Any other person may also purchase a carbon credit certificate on a voluntary basis.
• Energy conservation code for buildings:
  • The bill empowers the central government to specify energy conservation code for buildings.
  • The code prescribes energy consumption standards in terms of area.
  • This new code will provide norms for energy efficiency and conservation, use of renewable energy, and other requirements for green buildings.
• Standards for vehicles and vessels:
  • Under the bill, the 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 (includes ships and boats).
  • The failure to comply with standards will be punishable with a penalty of up to Rs 10 lakh. Non-compliance in case of vessels will attract an additional penalty of up to twice the price of oil equivalent of energy consumed above the prescribed norm.
• Regulatory powers of SERCs:
  • The Act empowers the State Electricity Regulatory Commissions (SERCs) to adjudge penalties under the Act.
  • The Bill adds that SERCs may also make regulations for discharging their functions.
• Composition of the governing council of BEE:
  • The Bill provides for the setting up of governing council of the Bureau of Energy Efficiency (BEE).
  • The Bureau will have a governing council with members between 20 and 26 in number.

Sources: The Hindu BL

Mains Question:

Q. “Governments across the world are making boosting commitments towards climate action to avert environmental crisis.” Discuss the provision of Energy Conservation (Amendment) Bill, 2022 in this regard. (250 Words).