Energy Conservation (Amendment) Bill, 2022 – Update (December, 2022)

December 14, 2022

The Indian Parliament has recently passed the Energy Conservation (Amendment) Bill, 2022, which amends the Energy Conservation Act, 2001 and promote energy efficiency and conservation in India.

What are the key features of the Bill?

Carbon Credit Trading

The 2022 Amendment Bill empowers the Indian Government to specify the carbon credit trading scheme. Carbon credit is a tradeable permit that allows the production of specified amount of carbon dioxide and other GHG emissions. The carbon credit certificates, issued by the government, can be traded.

Energy Consumption Standards

The Central Government is empowered to specify energy consumption standards, requiring designated consumers to meet a minimum share of energy consumption from non-fossil fuel sources. The government can specify different consumption thresholds for different non-fossil fuel sources and consumer categories. A maximum penalty of up to Rs.10 lakh will be incurred if a designated consumer failed to comply with this obligation. The non-compliance can also attract a penalty of up to twice the price of oil equivalent of energy consumed above the prescribed norm.

Energy Conservation Code for Buildings

The Central Government is empowered to specify Energy Conservation Code, which prescribes energy consumption standards in terms of area. The 2022 Bill amends this provision of the Act to provide for an Energy Conservation and Sustainable Building Code. This new code provides norms for improving energy efficiency and conservation, use of renewable energy and other requirements for green buildings.

The Act provides that the code applies only to commercial buildings that were built after the notification of the code, and have a minimum connected load of 100 kilowatt (kW) or 120 kilo volt-ampere (kVA) contract load. The 2022 Bill covers office and residential buildings that meet the aforementioned criteria. It also empowers the state governments to reduce the load thresholds.

Energy Consumption Standards for Vehicles and Vessels

The Act allows setting up energy consumption standards for equipment and appliances that consume, generate, transmit or supply energy. The 2022 Bill expands the scope to include vehicles (defined under the Motor Vehicles Act, 1988) and vessels (ships and boats). Failure to comply would attract a penalty of up to Rs.10 lakh. If a vessel fails to comply with the standards, it would attract an additional penalty of up to twice the price of oil equivalent of energy consumed above the prescribed norm. Vehicle manufacturers who fail to comply with the standards will have to pay a maximum penalty of up to Rs.50,000 per unit of the vehicle sold.

Expansion of Governing Council of BEE

Bureau of Energy Efficiency (BEE) is set up under the Act. The governing council of BEE has 20 to 26 members. These include secretaries of six departments, representatives of regulatory authorities like Central Electricity Authority and the Bureau of Indian Standards and up to 4 members representing industries and consumers.

The Amendment Bill has increased the number of members between 31 and 37. The number of secretaries has been increased to 12. The Bill also provides for up to 7 members representing industries and consumers.

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