The Union Government has introduced the Energy Conservation Bill in Parliament, which proposes norms for establishing carbon markets. The bill proposes to bring buildings under the ambit of the energy conservation regime with an estimated 300 billion units of electricity saved by 2030.
Carbon credit trading may soon achieve uniformity in India as the proposed Energy Conservation Bill aims to lay down framework for the National Carbon Market and the carbon credit trading scheme. The domestic market for carbon trading will be based on the "perform, achieve and trade" mechanism, and may be linked with international markets at a later stage. The bill mandates use of non-fossil sources, including green hydrogen, for energy sources and feedstock.
The bill aims to strengthen the existing regulatory framework and provide financial powers to states to implement Energy Conservation schemes. Another important aspect of the bill is that it seeks to increase the scope of the Energy Conservation Building Code by bringing residential buildings within the energy conservation regime.
Residential buildings consume about 24 percent of the total electricity in India. With the sector expected to add 3 billion square metres by 2030, power demand is slated to skyrocket. The bill says that the additional cost of 3-5 percent for buildings will be recovered within 4-5 years through savings on energy costs, even as the initiative aims to save 300 billion units of electricity by 2030 by implementing the building code.
The bill says that states will have powers to reduce the size of residential buildings covered under the definition of the act, and the Centre will have the powers to issue Carbon Credit Certificates to registered entities. Penalties for not complying with building code will be administered via building bylaws, where individual dwellings are supposed to be excluded for now, while group housing societies and multi-storey buildings are included.
Only designated consumers have been mandated to appoint energy managers, which exempts small units from any extra burden. Non-compliance with can lead to a penalty of up to Rs 10 lakh, while extended failures in compliance can lead to penalties up to Rs. 10,000 per day. The bill proposes a penalty of up to twice the price of a metric tonne of oil used in excess by a non-compliant industrial unit or vessel, and intends to penalise vehicle manufacturers for every sold vehicle which fails to comply with fuel consumption norms.
Green energy experts have welcomed the bill, stating that investment in clean technology will help corporates in greening their business profiles and get an additional revenue stream from the attached carbon credits. However, the provision in the bill which calls for implementation of the building code via existing bylaws needs to be clarified to remove any speedbumps in the construction of new buildings.