A consortium comprising the Confederation of Indian Industry (CII), climate change and sustainable development company Camco, and infrastructure advisory company ABPS Infra have submitted their recommendations on the implementation of the perform achieve trade (PAT) scheme to the Bureau of Energy Efficiency (BEE).
Under the PAT scheme, almost 714 industrial units across the country in nine sectors — cement, thermal power plants, fertilisers, aluminium, iron and steel, chlor-alkali, pulp and paper, textiles and railways — will be given targets for reducing energy consumption. The companies that better their targets will be allowed to sell energy-saving credits to those failing to effect the required cuts.
The consortium made three recommendations to BEE — trading of energy consumption allowances that would be derived only from reduction in energy intensity, minimised transaction costs per unit of the certificates and rigorous targets that are neither over- nor under-ambitious.
“We have outlined a set of recommendations based on international experiences in implementing carbon trading and certificates trading schemes. The learning from international experiences and policy recommendations based on that may be extremely helpful in designing the PAT scheme modalities, even as PAT is the only sheme of its kind and India is the first country to launch it,” said Rajesh Menon, senior director (energy), CII.
PAT is part of the BEE-initiated National Mission on Enhanced Energy Efficiency, which intends to enhance energy efficiency in the country, and is aimed at large energy-intensive industries and facilities.
The nine sectors, according to the recommendations, cover 65 per cent industrial consumption in the country. They also suggest how weak implementation cannot reach the desired targets and tight targets can make the Indian industry less competitive in the global markets.
The energy efficiency certificates can be traded on power exchanges and the India Energy Exchange.
“The closest scheme to PAT is the UK’s Climate Change Agreement and we will benefit a lot from the experiences of the Confederation of British Industry in engaging with such schemes,” said Menon.
