Reviewing the Energy Conservation (Amendment) Bill, 2022

"Just Transition" builds economic and political power to transition from an extractive to a regenerative economy. This entails tackling the production and consumption cycles comprehensively, without creating waste. The transition itself must be fair and reasonable, making amends for past wrongs and forging new power structures for the future.

To do this, production and consumption cycles must be addressed thoroughly and without producing waste. In order to make reparations for past wrongs and create new power structures for the future, the transition itself must be just and rational. 

Transitions must be expected. The industrial economy, which is driven by profit and based on white supremacy and patriarchy, is seriously destroying the planet's life support systems after centuries of worldwide exploitation. The United Nations' Sustainable Development Goals and the Paris Agreement's ambitions cannot be met without a well-managed phase-out of coal power facilities and a substantial expansion of clean energy. To ensure a future powered by clean energy, nations must move away from coal, the most prevalent and carbon-intensive source of energy.

The Energy Conservation (Amendment) Bill, 2022, which the government presented on August 5, 2022 in the Lok Sabha, is a significant milestone in India's Just Transition strategy. Its contentious ideas, which include the effect on farmers, power subsidies, and most crucially, the allocation of authorities and tasks between the Central and state governments, have drawn great scrutiny and controversy.

The Bill, which was passed by the Rajya Sabha on December 12, 2022, cleared the way for "mandatory use of non-fossil sources," such as green hydrogen, green ammonia, biomass, and ethanol for energy and feedstock, as well as the creation of carbon markets in the nation. The Bill proposes to mandate the use of non-fossil fuels for industrial operations and carbon credit trading schemes, which may encourage manufacturing enterprises to increase their usage of green energy for their purposes. 

The Organization for Economic Co-operation and Development (OECD) countries must achieve net zero by 2030 - China by 2040, India and the rest of the world by 2050 - because of the enormous disparity in emissions throughout the globe. India's goal of achieving net zero emissions by 2070 is a continuation of this. The Bill contains crucial provisions for controlling how much energy is used by machinery, appliances, buildings and enterprises. The requirement to use non-fossil fuels is one of the primary adjustments that have been presented. The Bill gives the federal government the authority to establish guidelines for energy usage. It also states that the government may mandate that certain consumers fulfil a minimum percentage of their energy needs from non-fossil sources. For various non-fossil sources and consumer categories, different consumption levels may be established.

The second section discusses "carbon credit trading." The Bill gives the Central government the authority to designate a carbon credit trading system. A tradeable permit to emit a certain amount of carbon dioxide or other greenhouse gases is implied by a carbon credit.

Thirdly, it emphasizes the need for "building energy conservation codes." The Bill gives the Central government the authority to establish an Energy Conservation Code for structures.

It also establishes "standards for vehicles and vessels." The Bill allows for the specification of energy consumption criteria for machinery and appliances that use, produce, transfer, or supply energy. The Bill calls for the Bureau of Energy Efficiency to be established (BEE). The Bureau's executive committee consists of 20 to 26 people. These consist of (i) secretaries from six different departments; (ii) representatives from regulatory bodies including the Central Electricity Authority and the Bureau of Indian Standards; and (iii) up to four members who represent businesses and consumers. Additionally, this Bill grants State Electricity Regulatory Commissions new regulatory authority.

The Energy Conservation Bill was modified by the Ministry of Power last year, and one of the revisions included determining how much renewable energy an industrial unit or other organization might spend on their entire consumption. Although it is excellent that the government has chosen to set goals for non-fossil energy sources in the business, this is not a new strategy, as many significant sectors have previously made progress towards switching to renewable energy. The key thing to remember is that the goals established for these industrial sectors should go above and beyond what the various industrial players have actually accomplished. The changes also refer to biomass as a clean fuel. But in the next years, its rising cost might become a problem.

The Energy Conservation Act of 2001 dealt with energy conservation, and the present measure deals with preventing climate change and protecting the environment by using both fossil and non-fossil fuels to produce electricity. The intent and goals of the current Bill are not included in its scope and goals. The Bill relates to environmental law's monitoring and regulation of climate change and carbon emissions. It serves as yet another illustration of the Centre's propensity to consolidate power by robbing states of their rights. The integrated role of the Central and state governments is not supported by the Bill. Without their permission, it places some obligations in the state governments' hands. A majority of states would not be able to voice their opinions to the Bureau of Energy Efficiency, because the Bill only calls for five state representatives. The spirit of cooperative federalism would be damaged by this.

By implementing a carbon credit structure, the Energy Conservation (Amendment) Bill seeks to limit carbon emissions and consumption by large customers. Large users will be required, under this approach, to meet a specific percentage of their energy needs through renewable energy sources. While the majority of Members of Parliament backed the legislation, some voiced concerns about a number of issues, including the carbon trading scheme, the reason it fell under the Power Ministry's purview rather than the Environment Ministry, and the lack of a more effective framework for regulating and implementing the carbon credit system. While being futuristic, the Bill has some unresolved issues which would require timely intervention. Nonetheless, it is a step in the right direction, promising India’s baby steps towards Just Transition. 

Nabeela Siddiqui is an Assistant Professor & Christos A Samuel is a student at CHRIST (Deemed to be University).