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Business News/ Industry / Energy/  Parliament passes bill to mandate use of green energy, set up carbon market

NEW DELHI : The Rajya Sabha on Monday cleared cleared the Energy Conservation (Amendment) Bill, 2022 aimed at putting in place provisions to make the use of clean energy mandatory.

The development also paves the way for the setting of carbon markets in the country. The bill was passed by Lok Sabha in August 2022. 

The Energy Conservation (Amendment) Bill, 2022 seeks to mandate the use of non-fossil sources, including biomass and ethanol, for energy and feedstock, along with the use of green hydrogen and green ammonia.

The bill also proposes to enhance the scope of the Energy Conservation Building Code and bring large residential buildings within the ambit of the energy conservation regime.

It also proposes to enhance the scope of the Energy Conservation Building Code and bring large residential buildings within the ambit of the energy conservation regime.

Around 36 members of Rajya Sabha took part in the discussion on the bill on Monday. Replying to the discussion on the bill, power minister RK Singh said that India has the potential of emerging as the leaders in new areas of green buildings and green hydrogen.

He sid that currently 24% of the energy consumption is from the housing sector and the government has targeted only the big commercial establishments having a load capacity of 100KW under the bill.

He said that goverment plans to mandate the use of green hydrogen in sectors like steel, refineries, fertilizer and cement industries, through green hydrogen consumption obligation. The obligation target would be set by a body headed by the cabinet secretary.

Talking on India’s green hydrogen plans, Singh said: “It is forward looking, it is futuristic. We are keeping up with the world. In fact, we are leading the world."

The minister said that the Indian industry has the potential to invest to set up capacity for 25 million tonne of green hydrogen capacity.

“We are relentlessly marching ahead towards our target of reducing India’s carbon intensity by 45% by 2030. The passage of Energy Conservation (Amendment) Bill, 2022 in Rajya Sabha today paves the way to enhanced use of renewable energy," said a tweet from the office of RK Singh.

The Energy Conservation Act of 2001 was last amended in 2010 to address various new factors that emerged with the energy market’s development over time and to provide for more efficient and effective use of energy and its conservation.

In its statement of objects and reasons for the amendments to the Act, the power ministry said that with time, and in the context of the energy transition with a special focus on the promotion of new and renewable energy and the National Green Hydrogen Mission, a need has arisen to further amend the said Act to facilitate climate targets committed at COP26 summit, promote renewable energy and development of domestic carbon market to battle climate change and mandate use of non-fossil sources to ensure faster decarbonization of Indian economy and help in achieving sustainable development goals in line with the Paris Agreement.

“It is considered necessary to have legal provisions to prescribe minimum consumption of non-fossil energy sources as energy or feedstock by the designated consumers. This will help in the reduction of fossil fuel-based energy consumption and resultant carbon emissions to the atmosphere," the statement of objects said.

It also said that a need is felt 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. Minister RK Singh said that the trading of carbon credits would be done on the power exchanges and Central Electricity Regulatory Commission (CERC) would be the regulatory body.

Further, in the endeavour to empower the state electricity regulatory commissions, the bill would allow the state commissions to make regulations regarding making applications to the commission and the fees payable.

The bill would now require presidential accent before becoming an Act.

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Updated: 12 Dec 2022, 10:06 PM IST
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