An Overview Of The Energy Conservation (Amendment) Act, 2022

The Energy Conservation Amendment Act, 2022 ("Act" ) received the assent of the President on 19^th December, 2022 and came into force on January 1, 2023. The Act mandates the use of renewable energy and carbon-neutral technologies, as well as the implementation of sustainability features across industries. In addition, the Act aspires to establish a domestic carbon market and implement a carbon trading mechanism to assist India in meeting its climate mitigation obligations.

KEY AMENDMENTS

1. Introduction of a Carbon Credit Scheme: The Act empowers the Union Government to introduce a carbon credit trading scheme ("Scheme") to encourage the reduction of carbon emissions in the economy. While the amendment does not define carbon credit, it is commonly understood to be a tradable permit to emit a certain amount of carbon dioxide or other greenhouse gases. The central government or any authorized agency may award carbon credit certificates to entities that