With 176.49 GW renewable energy (including large hydro) accounting for approximately 42.5 per cent of the total generation capacity, installed in India as of June 2023, the country remains steadfast on its trajectory of augmenting RE capacity to fulfill its ambitious pledge of sourcing 50 per cent of energy demand from renewables by 2030 [1]. India has also committed to curtailing its overall carbon emissions by one billion tonne by 2030, and to honour such a commitment, a plethora of policy decisions have been introduced during the past six months, including the National Electricity Plan 2023 (NEP 2023) [2], the National Green Hydrogen Mission, 2023 (NGH Mission) [3], the Carbon Credit Trading Scheme (CCTS) [4] and the draft Green Credit Programme Implementation Rules [5].
Advt
These initiatives ar expected to propel integration of renewables and no-fossil feedstock into India’s energy mix, as well as alleviate the economic burden associated with reduction of carbon emissions. While the NEP 2023 sets out the blueprint for amplifying India’s generation capacity to address the growing energy demand [6], India’s ability to unlock the path of decarbonisation hinges on capitalising on energy efficiency and carbon reduction technologies. For this purpose, CCTS has been rolled out as a cap-and-trade system and envisages formulation of a carbon trading market, wherein obligated entities emitting carbon within the limits set out, are entitled to receive carbon credits, which can then be sold to entities exceeding their quotas. Imposition of a price on emissions beyond the prescribed limit will empower the CCTS to channel private sector investments in clean energy technologies. If implemented in earnest, the energy efficiency measures can yield approximately 11-16 per cnt energy saving benefits in the industrial sector [7.Harnessing the benefits of carbon market, however, is contingent upon its successful implementation, which necessitates rigorous target and price setting, development of credible verification mechanisms and penalties for failure to achieve targets. The total valuation of the global carbon market (along with carbon taxes) was estimated to be upward of $95 billion by the World Bank in 2022, covering around 23 per cent of the global emissions [8]. To garner a sizeable share of this evolving market, the Bureau of Economic Efficiency (BEE) must draw from its experience under the Perform Achieve and Trade (PAT) scheme, and avoid the pitfalls which lead to oversupply of credits in the market. Clarity is also needed on permissibility and mechanics of voluntary purchasing (outside the compliance market), which is itself a $2 billion domain [9]. Although an earlier draft of the CCTS contemplated this aspect, it was omitte in the final version without any explanation. Additioally, expanding the ambit of carbon market to provide for cross-border transactions in carbon credits within the contours of CCTS, can be useful for monetising the cost of emission reduction and encouraging deployment of critical capital towards new ‘green’ technology, including low-carbon fuels.
Advt
The attempt to proliferate low-carbon fuels has been bolstered by the institutional support extended by flagship schemes of the government, such as NGH Mission and the strategic interventions for green hydrogen transition programmes [10]. While inclusion of green hydrogen and green ammonia in renewable purchase obligations of the obligated entities [11] will drive up the demand for such fuels, the government may also consider implementing measures to scale up production, improve logistics, establish a robust supply chan, and stimulate demand of other low-cost fuels (including sustainable aviation fuel) through minimm demand mandates. Despite high initial costs, if budgets provide for viability gap funding for the low-carbon fuels and the uptake of such fuels is guaranteed by introduction of demand mandates, technologically efficient measures for production of such fuels will emerge and give impetus to the green shift [12].As India navigates this transition journey to meet its commitments, it is faced with the challenge of striking a balance between the demands of industrialisation and decarbonisation. It is now imperative for India to implement solutions, which draw wisdom from past endeavours and incorporate innovative approaches, to emerge as a global frontrunner in the green transition.(This piece was written exclusively for ETEnergyworld by Ajay Sawhney, Partner, and Ragini Agarwal, Associate, Cyril Amarchand Mangaldas.)References:1 ‘Installed Capacit’ Dashboard, Central Electricity Authority (last accessed on August 03, 2023).2 National Electicity Plan – Volume I (Generation), Central Electricity Authority (May, 2023), available at https://cea.nic.in/wp-content/uploads/irp/2023/05/NEP_2022_32_FINAL_GAZETTE-1.pdf.3 National Green Hydrogen Mission, Ministry of New and Renewable Energy (January 2023), available athttps://mnre.gov.in/img/documents/uploads/file_f-1673581748609.pdf.4 Carbon Credit Trading Scheme, 2023, Ministry of Power (June 30, 2023), available athttps://beeindia.gov.in/sites/default/files/CCTS.pdf.5 (Draft) Green Credit Programme Implementation Rules, 2023, Ministry of Environment, Forest and Climate Change (June 26, 2023), available at https://moef.gov.in/wp-content/uploads/2023/06/Draft-GCP-Notification-Inviting-Comments-27062023.pdf.6 20th Electric Power Survey of India, Central Electricity Authority (November 2020), available at https://cea.nic.in/wp-content/uploads/ps___lf/2022/11/20th_EPS____Report__Final___16.11.2022.pdf.7 Unlocking National Energy Efficiency Potential (UNNATEE) (Strategy Plan Toards Developing an Energy Efficient Nation (2017-2031)), Bureau of Energy Efficiency (June, 2019), available athttps://beeindia.gov.in/sites/default/files/UNNATEE_0.pdf.8 State and Trends of Carbon Pricing 2023, World Bank (May 2023), available at https://www.worldbank.org/en ews/press-release/2023/05/23/record-high-revenues-from-global-carbon-pricing-near-100-billion.9 State and Trends of Carbon Pricing 2023, World Bank (May 2023), available athttps://openknowledge.worldbank.org/entities/publication/58f2a409-9bb7-4ee6-899d-be47835c838f.10 Scheme guidelines for implementation of “Strategic Interventions for Gren Hydrogen Transition (SIGHT) Programme” of the NGH Mission, Ministry of New and Renewable Energy (June 28, 2023), available at:https://mnre.gov.in/img/documents/uploads/file_f-1687964057675.pdf andhttps://mnre.gov.in/img/documents/uploads/file_f-1687963916599.pdf.11 lectricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.12 The Gren Shift(The low carbon transition of India’s Oil & Gas sector), Ministry of Petroleum and Natural Gas (April 2023), available at https://mopng.gov.in/files/uploads/ETAC_2023_FINAL_PRINT.pdf.
By
Ajay Sawhney
&
Ragini Agarwal
,
ETEnergyWorld
Published On Aug 17, 2023 at 10:28 AM IST
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India has also committed to curtailing its overall carbon emissions by on billion tonne by 2030, and to honour such a commitment, a plethora of policy decisions have been introduced during the past six months, including the National Electricity Plan 2023 (NEP 2023) [2], the National Green Hydrogen Mission, 2023 (NGH Mission) [3], the Carbon Credit Trading Scheme (CCTS) [4] and the draft Green Credit Programme Implementation Rules [5].These initiatives are expected to propel integration of renewables and non-fossil feedstock into India’s energy mix, as well as alleviate the economic burden associatedwith reduction of carbon emissions. While the NEP 2023 sets out the blueprint for amplifying India’s generation capacity to address the growing energy demand [6], India’s ability to unlock the path of decarbonisation hinges on capitalising on energy efficiency and carbon reduction technologies. For this purpose, CCTS has been rolled out as a cap-and-trade system and envisages formulation of a carbon trading market, wherein obligated entities emtting carbon within the limits set out, are entitled to receive carbon credits, which can then be sold to entities exceeding their quotas. Imposition of a price on emissions beyond the prescribed limit will empower the CCTS to channel private sector investments in clean energy technologies. If implemented in earnest, the energy efficiency measures can yield approximately 11-16 per cent energy saving benefits in the industrial sector [7].Harnessing the benefits of carbon market, however, is contingent upon its successful implementation which necessitates rigorous target and price setting, development of credible verification mechanisms and penalties for failure to achieve targets. The total valuation of the global carbon market (along with carbon taxes) was estimated to be upward of $95 billion by the World Bank in 2022, covering around 23 per cent of the global emissions [8]. To garner a sizeable share of this evolving market, the Bureau of Economic Efficiency (BEE) must draw from itsexperience under the Perform Achieve and Trade (PAT) scheme, and avoid the pitfalls which lead to oversupply of credits in the market. Clarity is also needed on permissibility and mechanics of voluntary purchasing (outside the compliance market), which is itself a $2 billion domain [9]. Although an earlier draft of the CCTS contemplated this aspect, it was omitted in the final version without any explanation. Additionally, expanding the ambit of carbon market to provide for cross-border transactions in carbon credits within the contour of CCTS, can be useful for monetising the cost of emission reduction and encouraging deployment of critical capital towards new ‘green’ technology, including low-carbon fuels.The attempt to proliferate low-carbon fuels has been bolstered by the institutional support extended by flagship schemes of the government, such as NGH Mission and the strategic interventions for green hydrogen transition programmes [10]. While inclusion of green hydrogn and green ammonia in renewable purchase obligations of the obligated entities [11] will drive up the demand for such fuels, the government may also consider implementing measures to scale up production, improve logistics, establish a robust supply chain, and stimulate demand of other low-cost fuels (including sustainable aviation fuel) through minimum demand mandates. Despite high initial costs, if budgets provide for viability gap funding for the low-carbon fuels and the uptake of such fuels is guaranteed by introduction of demand madates, technologically efficient measures for production of such fuels will emerge and give impetus to the green shift [12].As India navigates this transition journey to meet its commitments, it is faced with the challenge of striking a balance between the demands of industrialisation and decarbonisation. It is now imperative for India to implement solutions, which draw wisdom from past endeavours and incorporate innovative approaches, to emerge as a glbal frontrunner in the green transition.(This piece was written exclusively for ETEnergyworld by Ajay Sawhney, Partner, and Ragini Agarwal, Associate, Cyril Amarchand Mangaldas.)References:1 ‘Installed Capacity’ Dashboard, Central Electricity Authority (last accessed on August 03, 2023).2 National Electricity Plan – Volume I (Generation), Central Electricity Authority (May, 2023), available at https://cea.nic.in/wp-content/uploads/irp/2023/05/NEP_2022_32_FINAL_GAZETTE-1.pdf.3 National Green Hydrogen Mission, Ministry ofNew and Renewable Energy (January 2023), available athttps://mnre.gov.in/img/documents/uploads/file_f-1673581748609.pdf.4 Carbon Credit Trading Scheme, 2023, Ministry of Power (June 30, 2023), available athttps://beeindia.gov.in/sites/default/files/CCTS.pdf.5 (Draft) Green Credit Programme Implementation Rules, 2023, Ministry of Environment, Forest and Climate Change (June 26, 2023), available at https://moef.gov.in/wp-content/uploads/2023/06/Draft-GCPNotification-Inviting-Comments-27062023.pdf.6 20th Electric Power Survey of India, Central Electricity Authority (November 2020), available at https://cea.nic.in/wp-content/uploads/ps___lf/2022/11/20th_EPS____Report___Final___16.11.2022.pdf.7 Unlocking National Energy Efficiency Potential (UNNATEE) (Strategy Plan Towards Developing an Energy Efficient Nation (2017-2031)), Bureau of Energy Efficiency (June, 2019), available athttps://beeindia.gov.in/sites/default/files/UNNATEE_0.pdf.8 State and Trends of Carbon Pricing 2023, World Bank (Ma 2023), available at https://www.worldbank.org/en ews/press-release/2023/05/23/record-high-revenues-from-global-carbon-pricing-near-100-billion.9 State and Trends of Carbon Pricing 2023, World Bank (May 2023), available athttps://openknowledge.worldbank.org/entities/publication/58f2a409-9bb7-4ee6-899d-be47835c838f.10 Scheme guidelines for implementation of “Strategic Interventions for Gren Hydrogen Transition (SIGHT) Programme” of the NGH ission, Ministry of New and Renewable Energy (June 28, 2023), available at:https://mnre.gov.in/img/documents/uploads/file_f-1687964057675.pdf andhttps://mnre.gov.in/img/documents/uploads/file_f-1687963916599.pdf.11 Electricity (Promoting Renewable Energy Through Green Energy Open Access) Rules, 2022.12 The Gren Shift (The low carbon transition of India’s Oil & Gas sector), Ministry of Petroleum and Natural Gas (April 2023), available at https://mopng.gov.in/files/uploads/ETAC_2023_FINAL_PRINT.pdf.”,”keywords”:[“Renewable”,”World ank”,”National Green Hydrogen Mission”,”Bureau Of Energy Efficiency”,”Carbon Credit Trading Scheme”,”Central Electricity Authority”,”Green Credit Programme Implementation Rules”,”National Electricity Plan”,”Renewable Energy”],”articleSection”:”Renewable”,”url”:”https://energy.economictimes.indiatimes.com ews/renewable/indias-green-ambitions-an-assessment-of-recent-policy-decisions-to-curtail-carbon-emissions/102790455″,”description”:”Closing the gap n India’s environmental pledges pivots on the implementation of a structurally robust policy roadmap which promotes energy efficiency and curbs carbon emissions.”,”author”:[{“@type”:”Person”,”name”:”Ajay Sawhney”,”url”:”https://energy.economictimes.indiatimes.com/author/479259158/ajay-sawhney”},{“@type”:”Person”,”name”:”Ragini Agarwal”,”url”:”https://energy.economictimes.indiatimes.com/author/479261351/ragini-agarwal”},{“@type”:”Thing”,”name”:”ET EnergyWorld”,”url”:”https://energy.economictimes.indiatimes.com”}],”publisher”:{“@type”:”NewsMeiaOrganization”,”name”:”ETEnergyWorld”,”logo”:{“@type”:”ImageObject”,”url”:”https://img.etb2bimg.com/files/cp/upload-1679566191-et-energy-light-theme.png”,”width”:600,”height”:60}},”image”:[{“@type”:”ImageObject”,”url”:”https://etimg.etb2bimg.com/thumb/msid-102790455,width-1200,height-900,resizemode-4/.jpg”,”width”:1200,”height”:900}]}HomeNewsRenewableIndia’s green ambitions – An assessment of recent policy decisions to curtail carbon emissions
