India on track to decarbonize its economy, Passes Energy Conservation (Amendment) Bill, 2022

New Delhi: With an aim to achieve the carbon neutrality and energy conservation, Parliament has passed the Energy Conservation (Amendment) Bill, 2022, which empowers the Centre to specify a domestic carbon credit trading scheme and make its mandatory to the designated consumer to meet a portion of their energy needs from non-fossil sources.

The domestic carbon market scheme will be a key step in achieving India’s nationally determined contributions under the Paris climate pact, according to the power ministry, which had tabled the bill.

The bill has already passed by the Lok Sabha on August 8. Replying to a debate on the Bill in the House, Union Minister for New and Renewable Energy Raj Kumar Singh said that,” it is a matter of pride for all the citizens, the way India has moved on energy transition and enhanced the renewable energy capacity”.

“The Energy Ministers of various countries who have visited India are impressed with the progress in renewable the energy sector, adding that no developed country has made as much progress as India in energy transition and climate action. 

Singh informed the House that during 2015 at COP-21, as part of its Nationally determined contributions, NDCs, India had committed to achieving 40 per cent of its installed electricity capacity from non-fossil energy sources by 2030.

He said, the country has achieved this target in November 2021, nine years ahead of the set target.

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.

The entities will be entitled to trade the certificates. Any other person may also purchase a carbon credit certificate on a voluntary basis.

During the COP-26 summit in 2021 at Glasgow, India made the commitment of reducing total projected carbon emissions by one billion tonnes by 2030. It also committed to reduce the carbon intensity of the economy by 45% by 2030 over 2005 levels.

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.

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 decarbonisation of the Indian economy.