Parliament passes bill to mandate use of renewable energy, carbon trading
New Delhi, December 14, 2022
The Bill is expected to be a step for India toward fulfilling its goals of cutting emissions and the use of renewable energy
The Parliament has passed the Energy Conservation (Amendment) Bill, 2022 that aims to mandate the use of green energy and enables the government to set up a carbon trading scheme. The Bill also allows the government to specify the minimum amount of non-fossil sources to be used by designated energy consumers.
The bill, which was passed in the Lok Sabha on August 8, got approval in Rajya Sabha on Monday.
While talking about the Bill in the Rajya Sabha, Power Minister R K Singh said, "This is the only planet we have and there are no alternatives. This bill (The Energy Conservation Amendment Bill, 2022) is one more step towards the concrete action that our country has taken."
He said that government 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, Singh said.
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.#EnergyTransition #ClimateAction pic.twitter.com/WgZRe0pJ5D
— R. K. Singh (@RajKSinghIndia) December 12, 2022
Key features of the Bill:
- Promotion of non-fossil energy sources and non-fossil feedstock
The Bill 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 power minister said that government 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, Singh said.
- Development of a framework for carbon markets
The Act gives the union government the authority to designate a carbon credit trading system. A tradable permit to emit a certain amount of carbon dioxide or other greenhouse gases is implied by a carbon credit.
In its statement of objects and reasons for the amendments to the Act, the power ministry 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.
According to Power Minister R K Singh, the carbon price would be determined by the market and the Central Electricity Regulatory Commission (CERC) would regulate carbon credit trading.
- Increasing the scope of the Energy Conservation Building Code (ECBC)
The bill suggests that the energy conservation code for buildings be amended to an energy-conserving and sustainable building code. The code prescribes energy consumption standards. It also proposes to bring large residential buildings within the ambit of the energy conservation regime.
India's renewable energy target
According to India's commitments under the United Nations Framework Convention on Climate Change (UNFCCC) at the Conference of Parties (COP26) last year, the target is to achieve 50 per cent of the installed capacity of electricity generation from renewable sources. India has also promised to cut emission intensity by 45 per cent.
During the discussion on the Bill in the Rajya Sabha, the power minister said that India has taken the lead when it comes to the energy transition.
[The Business Standard]