Print Friendly, PDF & Email

Bill to amend energy conservation act introduced in RS

GS Paper 3

Syllabus: Infrastructure: Energy, Ports, Roads, Airports, Railways etc


Source: TH 

Context: The Union Minister of Power introduced the Energy Conservation (Amendment) Bill 2022 in Rajya Sabha.



  • The bill seeks to amend the Electricity Conservation Act 2001 to include changes such as incentivising the use of clean energy through the issuance of carbon saving certificates.
  • The Electricity Conservation Act 2001
    • Specify norms and standards of energy efficiency for appliances, industrial equipment and buildings.
    • Prohibit the manufacture/ sale/ purchase of equipment unless it conforms to specified norms.
    • Established the Bureau of Energy Efficiency (BEE).
    • Empowers the Centre to issue energy savings certificates providing for a framework for energy tradinggiven to industries that consume less and can be sold to industries that consume more.
    • Violators attract a penalty of Rs 10 lakh and consumers will be penalised as per their excess consumption.
    • Appeals will be heard by the appellate tribunal established under the Electricity Act, 2003.


Need to amend the above Act:

  • To consolidate on the current Act’s success. According to BEE, measures for efficient energy use saved approx. 28 million tonnes of oil equivalent energy in 2019-20.
  • To facilitate the achievement of COP-26 goals to ensure faster decarbonisation of the Indian economy.


Key features of the Energy Conservation (Amendment) Bill 2022:

  • Carbon credit trading scheme: Carbon credit implies a tradable permit to produce a specified amount of CO2 or other GHG emissions.
    • The central government/ authorised agency may issue tradable carbon credit certificates to entities compliant with the scheme.
  • Obligation to use non-fossil sources of energy: Designated consumers (such as industries) may be asked to meet a minimum share of energy consumption from non-fossil sources.
  • New Energy Conservation and Sustainable Building Code: Unlike the old code, this will also apply to the office and residential buildings with consumption above a threshold.
  • Standards for vehicles and vessels: Apart from equipment and appliances, the Bill expands the scope to include vehicles and vessels (ships, boats).
  • Strengthening BEE: By changing the composition of its governing council including representatives of industries and consumers.
  • Promoting green hydrogen: As an alternative to the fossil fuels used by industries.
  • Penal provisions: Failure to comply with standards will be punishable with a penalty of up to Rs 10 lakh.


Main objectives of the Bill:

  • Its goal is to reduce GHG emissions and combat climate change.
  • To expand India’s carbon market and promote the use of clean technology.
  • To achieve its Nationally Determined Contributions (NDCs), as outlined in the Paris Climate Agreement, by 2030.


Key issues that need to be addressed:

  • Appropriate Ministry to regulate the carbon credit trading scheme: The Ministry of Power/ the Ministry of Environment?
  • There is no clarity on whether renewable energy, energy savings and carbon credit trading schemes involve the same or different activities.
  • Meeting non-fossil energy use obligations may adversely impact the competitiveness of the industry.


Insta Links:

An Insight – The Energy Conservation (Amendment) Bill, 2022


Mains Links:

Q. Evaluate the role that the Energy Conservation (Amendment) Bill, 2022 can play in ensuring greater use of renewable energy and enforcing penalties on industrial polluters for carbon emissions. (250 words)