With an aim to promote renewable energy, develop “domestic carbon market", and introduce the concept of “carbon trading", The Energy Conservation (Amendment) Bill was introduced in the Lok Sabha on Wednesday.
Power and Renewable Energy Minister RK Singh said with the Bill, the government is introducing a “carbon market".
“It means whoever moves to green energy, carbon credits can be bought from them, and financing green energy will be easier. Our carbon dioxide emissions will go down."
Here’s all you need to know about the framework for national carbon market with carbon credit trading scheme:
- It looks to create a domestic market for carbon trading based on perform, achieve and trade mechanism may be extended overseas.
- It mandates the use of non-fossil sources, including Green Hydrogen for energy sources and feedstock.
- It brings residential buildings within the energy conservation regime, and increase the scope of Energy Conservation Building code.
- It states that an additional cost of 3-5% for buildings will be recovered within 4-5 years from savings on energy costs.
- The initiative aims to save 300 billion units of electricity by 2030 by implementing building code
- The penalties for not complying with the building code will be administered via building bye-laws. However, individual dwellings will be excluded.
- States will have the power to reduce the size of residential buildings covered 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 under the scope.
- The aim is to strengthen the regulatory framework and provide financial powers to states to implement energy conservation schemes.
- The Centre will have the power to issue Carbon Credit certificates to registered entities
- Only designated consumers will be mandated to appoint energy managers. There will be no extra burden on small units.
- Railway units will be included as designated consumers for compliance with energy saving targets
- Penalties for non-compliance: Non-compliance to lead to penalty up to Rs 10 lakh. Extended failures to comply to lead to penalties up to Rs 10k per day.
Industrial unit or vessel: Penalty of up to twice the price of metric ton of oil used in excess.
Vehicle maker: Penalty per unit of vehicle sold. Errant vehicle makers to pay Rs 25k/vehicle up to 0.2 litres up to 100 km, Rs 50k/vehicle above 0.2 litres
Failure to give info, comply with rules to lead to Rs 50k penalty on first non-compliance. Unpaid penalties may be recovered as arrears of land revenue.