Industries will pay for low energy efficiency

In a new measure to check emissions responsible for global warming, the government has notified a domestic carbon trade mechanism that will impose penalties on industries failing to achieve new energy efficiency targets.

Updated on: Apr 3, 2012, 01:49:49 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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In a new measure to check emissions responsible for global warming, the government has notified a domestic carbon trade mechanism that will impose penalties on industries failing to achieve new energy efficiency targets.

New rules notified for eight energy-intensive sectors will allow the government to impose a penalty of over Rs 10,000 for missing the target by 1 tonne of oil-equivalent. It means that if a company falls short by 5 tonnes of oil-equivalent, it will have to pay a penalty of over Rs 50,000 to the government.

There is also an incentive for companies that surpass the energy-efficiency target set for 2014-15. For each extra tonne of oil-equivalent saved, the company will get an energy saving certificate. These certificates can be sold through a market mechanism to companies that fail to meet the target.

Bureau for Energy Efficiency (BEE) director general Ajay Mathur told HT that the scheme would enable the Indian industry to “progressively” reduce its carbon intensity, strengthening its bottom line as well. “In a way, the production cost for each tonne will reduce,” he said.

Among the world’s first domestic carbon emission trading mechanisms, this scheme — known as Perform Achieve Trade (PAT) — has been implemented under the National Mission for Energy Efficiency Enhancement. It is a part of the Prime Minister’s National Action Plan on Climate Change.

The power ministry on Friday notified the rules under the Energy Conservation Act-2011, aimed at reducing 6.6 million tonnes of oil-equivalent by 2015, or 4% of the energy consumed by these industries in 2009-10. As the bureau wanted to target energy-intense industries, eight sectors — iron and steel, cement, fertilisers, aluminum, pulp and paper, chloralkali, textiles and thermal power stations — were included.

Accounting for one-third of India’s total energy consumption, these sectors cover 478 industrial units whose energy consumption for producing a tonne of end-product is higher than the standard specified by BEE. They include some of India’s top companies, such as Reliance, Vedanta Aluminum Limited and Gujarat Fluorochemicals Limited.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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