Energy Conservation Bill amendments – A step towards energy transition: ICRA

• Amendments set a minimum usage clause for non-fossil fuel by high carbon-emitting sectors – power, transport, industries and buildings
• Provisions included incentivising the decarbonisation efforts by allowing carbon trading

ICRA Research has said that the major amendments in the Energy Conservation Bill, passed in the Lok Sabha recently is a positive step in the right direction. The bill has set a minimum usage clause for non-fossil fuel in certain sectors with high emissions. On the other hand, to ensure faster decarbonisation of the Indian economy and help achieve sustainable development goals, carbon trading has been introduced in the amendment. The Bill specifies the details regarding issuing authority, entitlement, and trading details for carbon credits. With India being the 4th largest emitter of CO2 in the world, carbon trading can open up opportunities, the ratings agency said in a note.
Many states are making significant efforts to adopt the Energy Conservation Building Code and are front-runners in energy saving in commercial and public buildings. The scope of the Bill has been expanded to include residential buildings, which account for 4% of CO2 emissions. The Bill also expands the scope to include vehicles (as defined under the Motor Vehicles Act, 1988) and vessels (which include ships and boats).

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