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NEW DELHI : Union power minister Raj Kumar Singh on Wednesday introduced amendments to the Energy Conservation Act in the Lok Sabha to put in place enabling provisions to make the use of clean energy, including green hydrogen, mandatory and to establish carbon markets.

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

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

On 18 July, Mint had reported that the government plans to introduce amendments to the Energy Conservation Act in monsoon session of the parliament.

The Energy Conservation Act, 2001 was last amended in the year 2010 to address various new factors which emerged with the development of the energy market over a period of 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 the passage of time, and in the context of energy transition with special focus on promotion of new and renewable energy and 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 reduction of fossil fuel-based energy consumption and resultant carbon emissions to the atmosphere," it said.

Similarly, a need is also felt to provide 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, said that statement.

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

The bill would also empower state governments to make rules regarding fees to be levied for the services rendered by the designated agency for promoting efficient use of energy and its conservation along with the preparation of the budget of the designated agency.

Along with the proposal to increase members in the governing council of the Bureau of Energy Efficiency, the bill, also seeks to empower the Bureau to make regulations regarding the agency which may be authorised to carry out the functions of the bureau and the technical qualification to test samples.

The bill further said that state governments shall constitute a fund to be called the ‘State Energy Conservation Fund’ for the purposes of promotion of efficient use of energy and its conservation within the state. The fund would be credited by grants and funds by the state government, Centre and any other organisation or individual.

Under the regulatory framework for carbon credit trading, the union government or any agency authorized by it may issue carbon credit certificate to the registered entity which complies with the requirements of the carbon credit trading scheme. The registered entity shall be entitled to purchase or sell the carbon credit certificate in accordance with the carbon credit trading scheme.

 On 1 August, Mint had reported that Prime Minister Narendra Modi may launch a national carbon trading platform on 15 August as India presses ahead with its climate commitments.

The push for carbon markets comes when India aims to turn carbon-neutral by 2070.

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