Energy Conservation (Amendment) Bill

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    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.

    Carbon Credits

    • A carbon credit is a permit that allows the company that holds it to emit a certain amount of CO2 or other greenhouse gases.
    • One credit permits the emission of a mass equal to one tonne of carbon dioxide.
    • These were devised as a market-oriented mechanism to reduce greenhouse gas emissions.
    • Companies get a set number of credits, which decline over time. 
    • They can sell any excess to another company.

    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.

    About Paris Agreement:

    • It is a legally binding international treaty on climate change.
    • It replaced the Kyoto Protocol, an earlier agreement to deal with climate change.
    • It is a landmark agreement as it brings all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects, for the first time.
    • It was adopted by 196 Parties at COP 21 in Paris, in December 2015 and entered into force in November 2016.
    • Nationally Determined Contributions (NDCs): 
      • To achieve the targets under the agreement, the member countries have to submit the targets themselves, which they believe would lead to substantial progress towards reaching the Paris temperature goal. 
        • Initially, these targets are called Intended Nationally Determined Contributions (INDCs). 
        • They are converted to NDCs when the country ratifies the agreement.

    Panchamrit strategy:

    • ‘Panchamrit’ strategy was announced at the COP 26 in Glasgow conference into enhanced climate targets.
      • India will increase its non-fossil fuel energy capacity to 500 gigawatt (GW) by 2030.
      • It will meet 50 percent of its energy requirements from renewable sources by 2030.
      • The total projected carbon emissions will be reduced by 1 billion tonnes from now through 2030.
      • The carbon intensity of its economy will be brought down to less than 45 percent.
      • India will achieve its target of net zero by 2070.

     

    Source: TH

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