Parliament Passes Energy Conservation (Amendment) Bill To Promote Use Of Non-Fossil Energy

The Bill was passed by the Lok Sabha in August 2022. It empowers the central government to specify energy consumption standards and require designated consumers to meet a minimum share of energy consumption from non-fossil sources.

It also seeks 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 sectors.

(a) mandate commercial consumers with 100KW consumption to use non-fossil sources, including Green Hydrogen, Green Ammonia, Biomass and Ethanol for energy and feedstock;

(b) establish Carbon Markets and specify a carbon credit trading scheme;

(c) bring large residential buildings within the fold of Energy Conservation regime and empower the state governments to lower the load thresholds;

(d) enhance the scope of Energy Conservation Building Code and prescribe consumption standards in terms of area;

(f) increase members in the Governing Council of Bureau of Energy Efficiency;

(g) empower the State Electricity Regulatory Commissions to make regulations for smooth discharge of its functions.

Most members supported the legislation, finding it to be a step towards sustainability and economic strengthening. However, concerns were raised with respect to infrastructural constraints, implementation issues, etc.

Congress MP and Senior Advocate Dr. AM Singhvi supported the Bill but raised four issues:

1. He said that the 'Bureau of Energy Efficiency' is under-utilised, where the body's expenditure was only 54% of the budget estimate in the previous Financial Year. "When you're only 50% efficient to use it, then why create such huge bureaucracy system," he said.

2. Singhvi highlighted the 'paradox' in introducing this Bill while the overall subsidy on Non-fossil Energy has been reduced by the government. Rather, it has been moved from 5% GST bracket to 12% bracket for 7 projects in 2021.

3. He said that subsidy in Renewable sector has been reduced by 59% in 2017-22 whereas Fossil energy has 900% more subsidy than non-fossil energy.

4. He said Government policies attract more investments in Fossil energy sectors and there is a need to generate demand for non-fossil energy. 

Minister of New and Renewable Energy Raj Kumar Singh responded that the Bill is part of a comprehensive framework adopted by the government in its action against global warming and climate change.

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