The Energy Conservation (Amendment) Bill was introduced in the Lok Sabha on Wednesday to promote renewable energy, develop a “domestic carbon market” and introduce the concept of “carbon trading”.
Power and Renewable Energy Minister RK Singh said that with the bill, the government is introducing a “carbon market”.
“That means carbon credits can be bought from whoever turns to green energy, and it will be easier to finance green energy. Our carbon dioxide emissions will be reduced.”
Here’s what you need to know about the structure of the national carbon market with the Carbon Credit Trading Scheme:
- It seeks to create a domestic market for carbon trading based on performance, achievement and trading mechanism that can be extended overseas.
- It mandates the use of non-fossil sources, Including green hydrogen for energy sources and feedstock.
- This brings residential buildings within the energy conservation regime, and broadens the scope of the Energy Conservation Building Code.
- It states that an additional cost of 3-5% for buildings will be recovered within 4-5 years from the savings on energy costs.
- Objective of the Initiative Save 300 billion units of electricity by 2030 by enforcing building codes
- Non-compliance with building codes will result in fines through building bylaws. However, individual residences will be excluded.
- States will have the power to reduce the size of residential buildings falling under the definition of the Act.
- Due to load requirement of 100 kW or more, group housing societies and multi-storey buildings will be included in its purview.
- It aims to strengthen the regulatory framework and provide financial powers to states to implement energy conservation schemes.
- hub Registered entities will have the right to issue carbon credit certificates
- Only designated consumers will be made mandatory to appoint Energy Managers. There will be no additional burden on small units.
- Railway units to be included as designated consumers for compliance with energy saving targets
- Penalties for non-compliance: Non-compliance can be fined up to Rs 10 lakh. Failure to comply extended to pay a penalty of up to Rs 10k per day.
Industrial unit or vessel: Penalty up to twice the cost of metric tonne of oil used in excess.
Vehicle Manufacturer: Penalty per unit of vehicle sold. The erring vehicle manufacturers will have to pay Rs 25,000 per vehicle from 0.2 liters to 100 km, and Rs 50,000 per vehicle above 0.2 liters.
Failure to provide information, first non-compliance to be followed by a fine of Rs 50k. Arrears of fine can be recovered as arrears of land revenue.
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