About Energy Conservation (Amendment) Bill, 2022

What’s in today’s article?

• Why in News?
• Background (Energy Conservation Act 2001, Need for an amendment)
• Amendment Bill (Key Features, Criticism)
• About BEE

 

Why in News?

• The Rajya Sabha passed the Energy Conservation (Amendment) Bill, 2022. The Lok Sabha had passed the amendment in August, 2022.
• With this, India has cleared the decks for mandate use of non-fossil sources, including green hydrogen, green ammonia, biomass and ethanol for energy and feedstock and establish carbon markets in the country.

 

Background of Energy Conservation Act:

• The Energy Conservation Act, 2001 provides a framework for regulating energy consumption and promoting energy efficiency and energy conservation.
• Energy efficiency means using less energy to perform the same task.
• The Act has set up the Bureau of Energy Efficiency to recommend regulations and standards for energy consumption.
• These apply to appliances, vehicles, industrial and commercial establishments and buildings.

 

What is the need for an Amendment to the Act:

• During the Conference of Parties (COP-26) summit in 2021 in Glasgow, UK, India made the following commitments which may be relevant for energy efficiency efforts:
  • Reducing total projected carbon emissions by one billion tonnes by 2030, and
  • Reducing the carbon intensity of the economy by 45% by 2030 over 2005 levels.
    • Carbon intensity is defined as the volume of carbon emissions per unit of GDP.
• In addition, India aims to have 500 GW of non-fossil energy capacity and meet 50% of its energy requirements from renewable energy by 2030.
• Against this backdrop, the Energy Conservation (Amendment) Bill, 2022 was introduced in Lok Sabha in August 2022.

 

About Energy Conservation (Amendment) Bill, 2022:

• The Bill seeks to amend the 2001 Act to –
  • Facilitate the achievement of COP-26 goals, and
  • Introduce concepts such as mandated use of non-fossil sources and carbon credit trading to ensure faster decarbonization of the Indian economy.
• Key Features of the Bill –
  • Carbon Credit trading –
    • The Bill empowers the central government to specify a carbon credit trading scheme.
    • Carbon credit implies a tradeable permit to produce a specified amount of carbon dioxide or other greenhouse emissions.
    • The central government or any authorised agency may issue carbon credit certificates to entities registered and compliant with the scheme.
  • Obligation to use non-fossil sources of energy –
    • The Act empowers the central government to specify energy consumption standards.
    • The Bill adds that the government may require designated consumers to meet a minimum share of energy consumption from non-fossil sources.
    • Designated consumers include – Industries, Transport sector and Commercial buildings.
  • Energy conservation code for buildings –
    • The Act empowers the central government to specify Energy Conservation Code for buildings.
    • The code prescribes energy consumption standards in terms of area.
    • The Bill amends this to provide for an ‘Energy Conservation and Sustainable Building Code’.
    • 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 Act, 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).
  • Composition of the governing council of BEE –
    • The Bill proposes to increase the number of members of the BEE from 20-26 to 31-37.

 

What are the criticisms of Energy Conservation (Amendment) Bill, 2022?

• No clarity on who will regulate the carbon credit market –
  • The Bill does not give clarity on how carbon credit certificates will be traded, or who will regulate such trading.
  • The question is if there were to be a regulator, should it be specified in the Act itself.
• Which Ministry is appropriate to regulate carbon credit trading
  • Carbon credit trading aims to reduce carbon emissions.
  • The question is whether the Ministry of Power or the Ministry of Environment is the appropriate Ministry to regulate this scheme.
• Vagueness around different form of activities
  • The same activity may be qualified for renewable energy, energy savings and carbon credit certificates.
  • The bill makes no mention of whether these certificates will be interchangeable.
• Concentration of power –
  • The Bill proposes only five representatives of the States and it means that a majority of the States would not be able to register their opinion in the Bureau of Energy Efficiency.

 

About Bureau of Energy Efficiency (BEE):

• The Government of India set up Bureau of Energy Efficiency (BEE) in March, 2002 under the provisions of the Energy Conservation Act, 2001.
• Objective of BEE: To assist in reducing energy intensity of the Indian economy.
• BEE coordinates with designated consumers, designated agencies and other organizations and recognize, identify and utilize the existing resources and infrastructure, in performing the functions assigned to it under the Energy Conservation Act.
• Concerned Ministry of BEE: Ministry of Power

 

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Q1) What is BEE star label?

BEE Star Label is a program run by the Indian government's Bureau of Energy Efficiency under Ministry of Power that promotes energy efficiency. The program provides information on the energy consumption of products and devices using different standardized methods.

 

Q2) What is the meaning of decarbonization?

Decarbonization refers to all measures through which an entity – reduces its carbon footprint, primarily its greenhouse gas emissions, carbon dioxide (CO2) and methane (CH4), in order to reduce its impact on the climate.

 

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