Topic: Renewable Energy and Policies.

SUBMITTED TO: SUBMITTED BY:

Dr. Chandreshwari Minhas Shubham Mahajan

Associate Professor of B.B.A LL.b (10th Sem)

Law 1120181904
 DECLARATION

I, sincerely vow that the project report is based on my own work completed during our study under
the supervision of my subject teacher. I claim that the assertions stated and conclusions reached are
the result of my study. I also confirm that

I. The work in the report is original, and it was completed by me under the overall supervision of my
subject teacher.

II. The work has not been submitted to any other institution for any other degree/diploma/certificate,
whether at this university or any other university in India or overseas.

III. In drafting the report, I adhered to the guidelines provided by the institution.

IV. Whenever the resources (data, theoretical analysis, and text) from other sources are used, they
have been credited in the report's text and includes their contact information in the references

Problem Profile:
The assignment focuses on why renewable energy is important for India? What are various policies
and programs adopted by Indian government to promote renewable energy?

Research methodology:

The doctrinal method of research is used in this assignment.

Objectives:

The study presents the dire need to shift dependency from non renewable energy to renewable
sources of India. Policies and Program adopted by Union of India to use renewable energy more and
more.

Research Question:

1) Why renewable energy is needed?

2) The potential of renewable energy in India.
3) Legal framework of renewable energy in India.
4) Various policies and programmes adopted for renewable energy in India.
Introduction

With a population of 1.3 billion, India has a massive demand for energy to fuel its rapidly growing
economy. From a power deficit nation at the time of Independence, the efforts to make India energy-
independent have continued for over seven decades. Today, we are a power surplus nation with a
total installed electricity capacity of over 4 Lakh MW1.
Keeping in mind the sustainable development goals, India's power generation mix is rapidly shifting
towards a more significant share of renewable energy. Today, India is the world's third largest
producer of renewable energy, with 40% of its installed electricity capicity coming from non-fossil
fuel sources2.
In recent decades, the world has witnessed a growing concern over the environmental impact of
conventional energy sources, which has prompted a global shift towards sustainable and renewable
alternatives. In this context, India has emerged as a frontrunner in implementing ambitious
renewable energy policies to address the twin challenges of energy security and climate change.
With a commitment to sustainable development, India has taken significant strides in harnessing its
vast renewable energy potential, transforming the country into a global renewable energy
powerhouse. This assignment aims to delve into the renewable energy policies adopted by India,
exploring their design, effectiveness, and impact on the nation's energy landscape. By examining the
key policies and initiatives introduced by the Indian government, we seek to gain a comprehensive
understanding of the efforts undertaken to promote renewable energy sources, such as solar, wind,
biomass, and hydroelectric power.
Throughout this assignment, we will analyze the drivers behind India's renewable energy transition
and the associated challenges faced by the nation. We will evaluate the policy frameworks,
regulatory mechanisms, and financial incentives that have been instrumental in encouraging private
investments and driving the deployment of renewable energy technologies across the country.
Moreover, we will explore the economic, environmental, and social implications of India's
renewable energy policies. This analysis will encompass the potential benefits in terms of reduced
greenhouse gas emissions, improved air quality, job creation, and enhanced energy access in rural
areas. We will also examine any limitations or obstacles encountered in the implementation of these
policies and discuss potential strategies to overcome them.
By examining the Indian context, we can draw valuable insights and lessons that may inform the
development and implementation of renewable energy policies in other nations. As the world
grapples with the urgent need to combat climate change and transition to a low-carbon future,
understanding the successes and challenges faced by India in its renewable energy journey becomes
crucial for global sustainability.

1
Ministry of Power, Central Electricity Authority, Growth of Electricity In India From 1947-2020.
2
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1785808
In conclusion, this assignment endeavors to provide a comprehensive analysis of the renewable
energy policies in India, shedding light on the nation's efforts to embrace sustainable energy sources
and reduce its dependence on fossil fuels. By studying India's experiences and outcomes, we aim to
contribute to the broader understanding of renewable energy policy frameworks and their
implications for sustainable development worldwide.

The Journey towards Renewable Energy in India:

As a developing nation at the time of Independence, India relied heavily on coal to meet its energy
demands. However, India has always been committed to looking for more alternative energy sources
for sustainable development. The beginning was made with hydropower, with major hydroelectric
power projects appearing on the scene of India’s energy arena. Over the years, many policy and
regulatory initiatives have promoted hydropower development and facilitated investments. Today,
we are 5th in the world regarding usable hydropower potential3.

Bhabha Atomic Research Centre (BARC) was founded in the 1950s to secure the country's long-
term energy independence. Today, we are the only developing nation with indigenously developed,
demonstrated and deployed nuclear reactors for electricity generation. This was made possible
through several decades of extensive scientific research and technology development4.

Work on wind energy started in India during the 1960s when the National Aeronautical Laboratory
(NAL) developed windmills, primarily for supplying irrigation water. Today, we have the 4 th
largest wind power capacity in the world, blessed with a constant movement of wind, especially in
the Southern, Western and North Western regions5.
Solar energy-based applications have benefited millions of Indians by meeting their cooking,
lighting and other energy needs in an environment-friendly manner. Having achieved large-scale
success in solar energy solutions, India has spearheaded the International Solar Alliance (ISA)
which is an action-oriented, member-driven, collaborative platform for increased deployment of
solar energy technologies. The membership of the ISA is open to all member-states of the United
Nations, and 107 countries are signatories to the ISA Framework Agreement at present. The
Alliance aims to efficiently utilise solar energy to reduce fossil fuel dependence, thereby creating a
greener planet.

3
FICCI, “Hydropower in India Key enablers for a better tomorrow”,
https://www.pwc.in/assets/pdfs/publications/2014/hydropower-in-india-key-enablers-for-better-tomorrow.pdf , Last
accessed on 15th May,2023.
4
Government of India Department of Atomic Energy, “India’s Nuclear Power Program”,
https://www.barc.gov.in/randd/artnp.html#:~:text=India%20is%20the%20only%20developing,technology
%20development%20primarily%20in%20BARC, Last accessed on 15th May, 2023.
5
Ministry of New and Renewable Energy, “Wind Energy”, https://mnre.gov.in/wind/current-status/, Last accessed on
15th May, 2023.
 Biomass has also been an essential source of energy for India. It is renewable, widely available,
carbon-neutral and has the potential to provide significant employment in rural areas. Rapidly
evolving technology has enabled thermal power plants to have more economical and energy-
efficient operations. India has co-fired biomass in thermal plants across the country to reduce its
CO2 footprint in thermal power generation. biomass power/co-generation programme since mid-
nineties. Over 800 biomass power and bagasse/non-bagasse cogeneration projects have been
installed in the country for feeding power to the grid6.

The few important steps taken by the Ministry of India for development of renewable Energy
sources are recapitulated below:-
 India has among the world's largest programs for renewable energy. India’s activities cover all major
renewable energy sources of interest to us, such as, biogas, biomass, solar energy, wind energy,
small hydro power and the other emerging technologies. In each of these areas, India has programs
of resource assessment, R&D, technology development and demonstration. Several renewable
energy systems and products are now not only commercially available, but are also economically
viable in comparison to fossil fuels, particularly when the environmental costs of fossil fuels are
taken into account.
 Realizing the need for concentrated efforts in this sector, The Government of India established a
Commission for Additional Sources of Energy (CASE) in the Department of Science and
Technology, in 1981. The mandate of CASE is to promote research anddevelopment activities in the
field of renewable energy.
 CASE was formally incorporated in 1982, in the newly created Department of Nonconventional
Energy Sources (DNES). In 1992 DNES became the Ministry for Nonconventional Energy Sources,
commonly known as MNES.
 India has a vast supply of renewable energy resources, and it has one of the largest programs in the
world for deploying renewable energy products and systems. Indeed, it is the only country in the
world to have an exclusive ministry for renewable energy development, the Ministry of Non-
Conventional Energy Sources (MNES). MNES was renamed the Ministry of New and Renewable
Energy.
 India has pioneered in the world in many administrative actions of renewable energy promotion
such as:- 1) Electricity regulatory commission within liberalized market1991 2) Mandatory
environmental audits for power projects -1992 3) Energy conservation bill -2000 4) Renewable
Energy promotion bill- 2005.
 The Ministry is encouraging the setting up of grid-interactive power projects based on renewable
energy through private investment route7.

 The State Nodal Agencies are responsible for promotion and development of private sector projects
by way of providing necessary clearances, allotment of land, allotment of potential sites in case of
SHP projects and facilitating power purchase agreements etc.
 State Electricity Regulatory Commissions (SERCs) are determining tariffs by taking into account
the submissions of all stakeholders, including consumers.
6
Ministry of New and Renewable Energy, “Bio Energy”, https://mnre.gov.in/bio-energy/current-status, Last accessed on
16th May, 2023.
7
Rehman S, Hussain Z ,” Renewable energy governance in India: challenges and prospects for achieving the 2022
energy goals”, Journal of Resources, Energy and Development 14(1):13–22.
 A number of leading financial institutions and banks are financing renewable energy based power.

Legal Provisions Under the Electricity Act, 2003:

The Central Government, from time to time, is responsible for preparing the national electricity
policy and tariff policy, in consultation, among others, with the State Governments for the optimal
utilization of all resources, including renewable sources of energy. The Act 2003 has several
enabling provisions, with a view to promote accelerated development of nonconventional energy
based power generation, as summarized below: Section 86(1) (e) 8, “The State Commission shall
promote co-generation and generation of electricity from renewable sources of energy by providing
suitable measures for connectivity with the grid and sale of electricity to any person, and also
specify, for purchase of electricity from such sources, a percentage of the total consumption of
electricity in the area of a distribution license” Section 3 (1)9, Government of India (GoI) shall, from
time to time, prepare the National Electricity Policy and Tariff Policy, in consultation with the State
Governments for developing the power system based on optimal utilization of resources such as
coal, natural gas, nuclear, hydro, and renewable sources of energy. Section 4 10, GoI shall, after
consultation with the State Governments, prepare a national policy, permitting stand-alone systems
(including those based on renewable sources of energy) for rural areas.

Recent programs started by Government in order to promote renewable Energy in India:

As of Feb 2023, Renewable energy sources, including large hydropower, have a combined installed
capacity of 178.79 GW. 
The following is the installed capacity for Renewables:
 Wind power: 42.6 GW
 Solar Power: 66.7 GW
 Biomass/Co-generation: 10.2 GW
 Small Hydro Power: 4.94 GW
 Waste To Energy: 0.55 GW                           
 Large Hydro: 46.85 GW
India has set a target to reduce the carbon intensity of the nation’s economy by less than 45% by the
end of the decade, achieve 50 percent cumulative electric power installed by 2030 from renewables,
and achieve net-zero carbon emissions by 2070. 

India‘s target is to produce five million tonnes of green hydrogen by 2030.This will be supported by
125 GW of renewable energy capacity. 57 solar parks of aggregate capacity 39.28 GW have been
approved in India. Wind Energy has an off-shore target of 30 GW by 2030 with potential sites
identified. 

Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM):

8
The Electricity Act,2003, § 86 (1), No. 36, Acts of Parliament, 2003, (India).
9
The Electricity Act,2003, § 3 (1), No. 36, Acts of Parliament, 2003, (India).
10
The Electricity Act,2003, § 4, No. 36, Acts of Parliament, 2003, (India).
 Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) is a flagship
program launched by the Government of India in 2019. The primary objective of PM-KUSUM is to
promote the use of solar energy in the agriculture sector and provide various benefits to farmers.
Here are the key components and features of PM-KUSUM:
 Solarization of Grid-Connected Agricultural Pumps: Under this component, farmers are encouraged
to install solar panels and generate solar power to meet their irrigation needs. The generated solar
power is first utilized for on-farm consumption, and any surplus power is injected into the grid. This
helps reduce the dependence on conventional grid electricity and lowers the operational costs for
farmers. Installation of Standalone Solar
 Agricultural Pumps: This component focuses on replacing existing diesel or electric pumps used for
irrigation with standalone solar pumps. These pumps operate directly on solar power and do not
require a connection to the grid. By adopting standalone solar pumps, farmers can reduce their diesel
consumption, decrease pollution, and achieve cost savings in the long run.
 Solarization of Barren/Fallow Land: PM-KUSUM also aims to utilize the barren and fallow land
available with farmers for setting up grid-connected solar power projects. This allows farmers to
generate additional income by leasing their land for solar power generation. The power generated
from these projects is fed into the grid, contributing to the overall renewable energy capacity of the
country.
 Financial Incentives and Support: Central Financial Assistance (CFA), The program provides a
subsidy or central financial assistance to farmers for the installation of solar pumps and solarization
of agricultural pumps. Operation and Maintenance (O&M) Charges: The program also covers the
O&M charges for a certain period, ensuring that farmers do not bear additional costs.
 Interest Subvention: Farmers can avail of loans at lower interest rates for the installation of solar
pumps and other components under PM-KUSUM11.

 Benefits and Impact:

Cost Savings: The use of solar pumps reduces the expenditure on diesel or electricity for irrigation,
leading to cost savings for farmers.

11
Ministry of New And Renewable Energy, “Pradhan Mantri Kisan Urja Suraksha evam Utthan Mahabhiyaan (PM-
KUSUM)”, https://pmkusum.mnre.gov.in/landing-about.html, Last accessed on 15th May, 2023.
 Improved Energy Access: PM-KUSUM helps in providing reliable and clean energy for irrigation,
particularly in remote and off-grid areas. Environmental Benefits: By reducing the use of diesel
pumps, the program helps in reducing greenhouse gas emissions and improving air quality.
Additional Income for Farmers: Through the solarization of barren and fallow land, farmers can earn
additional income by leasing their land for solar power generation. PM-KUSUM plays a crucial role
in promoting sustainable agriculture practices and ensuring energy security for farmers in India. By
integrating solar energy into the agricultural sector, the program not only reduces the carbon
footprint but also contributes to the overall renewable energy capacity of the country.

The Green Energy Corridors:

The Green Energy Corridors initiative is a set of policies and measures adopted by India to
strengthen the transmission infrastructure for renewable energy. The aim is to facilitate the smooth
integration and evacuation of renewable energy into the power grid. This initiative is crucial for the
effective utilization of renewable energy resources and ensuring a reliable and stable supply of green
power across the country.

Here are the key aspects and features of the Green Energy Corridors policies adopted by India:
 Dedicated Renewable Energy Transmission Infrastructure: The initiative focuses on the
development of dedicated transmission infrastructure for renewable energy. This includes the
construction of new high-voltage transmission lines and substations specifically designed to handle
the large-scale transmission of renewable power.
 Inter-State Transmission System (ISTS) for Renewable Energy: The Green Energy Corridors
program emphasizes the establishment of an efficient inter-state transmission system for renewable
energy. This enables the transfer of surplus renewable power from regions with high generation
potential to areas with high energy demand. It helps in minimizing transmission losses and
optimizing the utilization of renewable resources across the country.
 Development of Intra-State Transmission Infrastructure: Apart from inter-state transmission, the
initiative also focuses on strengthening the intra-state transmission infrastructure. This involves the
augmentation and modernization of existing transmission lines, as well as the construction of new
transmission facilities within states. It ensures the efficient transmission of renewable energy from
generation sources to consumption centers within each state. 12

 Smart Grid Technologies and Energy Storage: The Green Energy Corridors initiative promotes the
deployment of smart grid technologies to enhance grid stability and manage the variability of
renewable energy generation. It includes the integration of advanced monitoring, control, and
communication systems in the transmission infrastructure. Additionally, the program encourages the
utilization of energy storage technologies to facilitate the smooth integration of intermittent
renewable energy sources.
 Forecasting, Scheduling, and Balancing Mechanisms: To ensure grid stability, the initiative
mandates forecasting, scheduling, and balancing mechanisms for renewable energy generation. This
12
Government of India Ministry of Power, Transmission Works under Green Energy Corridors-I,
https://powermin.gov.in/en/content/transmission-works-under-green-energy-corridors-i, Last accessed on 16th May 2023.
 involves accurate prediction of renewable power generation and scheduling it in advance to maintain
grid stability. The integration of renewable energy forecasting and balancing mechanisms helps in
minimizing grid disruptions and ensuring the reliable supply of green power.
 Market Mechanisms and Renewable Energy Certificates: The Green Energy Corridors initiative
promotes the development of market mechanisms for renewable energy. It includes the
establishment of Renewable Energy Certificates (RECs) to incentivize renewable energy generation.
RECs are tradable certificates that represent the environmental attributes of renewable power
generation and help in meeting renewable purchase obligations.

The Green Energy Corridors policies adopted by India aim to address the challenges associated with
the integration of renewable energy into the power grid. By strengthening the transmission
infrastructure, deploying advanced technologies, and implementing market mechanisms, the
initiative facilitates the seamless transmission and utilization of renewable power. It plays a vital
role in achieving India's renewable energy targets and transitioning to a sustainable and low-carbon
energy system.

Renewable Purchase Obligation (RPO):

Renewable Purchase Obligation (RPO) is a regulatory mechanism that mandates electricity
consumers, including power distribution companies (DISCOMs), open-access consumers, and
captive power producers, to procure a certain percentage of their total electricity consumption from
renewable energy sources.
The purpose of RPO is to create a demand for renewable energy and promote its development and
integration into the power grid. Here is a detailed explanation of the Renewable Purchase
Obligation: Objectives:
a) Promote Renewable Energy: RPO aims to accelerate the adoption of renewable energy sources by
creating a market demand for renewable power generation.
b) Energy Transition: RPO supports the transition from conventional fossil fuel-based energy
sources to cleaner and sustainable renewable energy sources. 13
c) Grid Stability: By diversifying the energy mix and reducing dependence on fossil fuels, RPO
helps enhance grid stability and reliability. RPO Targets: RPO targets are set by regulatory
authorities or state electricity regulatory commissions. These targets specify the percentage of total
electricity consumption that must be sourced from renewable energy.
The targets are usually set on an annual basis and gradually increase over time to promote greater
renewable energy adoption. Compliance Mechanism: Entities obligated under RPO are required to
comply with the set targets by either generating renewable energy or purchasing Renewable Energy
Certificates (RECs). RECs represent the environmental attributes of one megawatt-hour of
renewable energy generation and can be traded in the market. By purchasing RECs, entities can
meet their RPO obligations without directly owning or operating renewable energy projects.

13
Ministry of New and Renewable Energy (Government of India), "Report On Development of Conceptual Framework
for Renewable Energy Certificate Mechanism for India ",
https://mnre.gov.in/img/documents/uploads/3538e292967048c8b78f6db30bc2720e.pdf
Penalties for Non-Compliance: Non-compliance with RPO targets can result in penalties imposed by
regulatory authorities. The penalties may include financial charges or non-compliance fees, which
can be significant and act as a deterrent to encourage compliance.
Flexibility and Banking Mechanism: Some jurisdictions allow flexibility in meeting RPO targets by
providing a banking mechanism. Under this mechanism, entities can carry forward any excess
renewable energy generation beyond their obligated targets to future compliance periods. This
provides flexibility and encourages additional renewable energy deployment.
Reporting and Monitoring: Entities subject to RPO obligations are required to submit periodic
reports on their renewable energy purchases and compliance status to the regulatory authorities.
This enables monitoring and assessment of progress towards achieving the renewable energy targets.
Renewable Energy Development: RPO plays a crucial role in driving investment in renewable
energy projects. It creates a predictable demand for renewable energy, encouraging developers to
invest in the construction of renewable power plants, such as solar, wind, biomass, or hydroelectric
projects.
State-Specific Variations: RPO targets and compliance mechanisms can vary across different states
or regions within a country. Each state determines its own RPO targets based on its renewable
energy potential, policy objectives, and regulatory framework. By establishing Renewable Purchase
Obligations, governments can accelerate the transition to cleaner and sustainable energy sources,
promote renewable energy investments, and contribute to reducing greenhouse gas emissions and
mitigating climate change.

The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) policy:

The Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) policy is an
initiative launched by the Government of India in 2015 to promote the adoption of electric vehicles
(EVs) and boost the domestic manufacturing of EV components. The policy has evolved over time,
with FAME II being introduced in 2019.
Here is a detailed note on the FAME policy: FAME I (2015-2019):

Objectives:
a) Promotion of Electric Mobility: FAME I aimed to accelerate the adoption of electric vehicles in
India to reduce dependence on fossil fuels and mitigate air pollution.
b) Domestic Manufacturing: The policy aimed to promote domestic manufacturing of EVs and their
components to boost the Indian automotive industry.
c) Incentives for EV Buyers: FAME I provided financial incentives in the form of upfront discounts
on the purchase of electric vehicles. These incentives were available for various categories of EVs,
including two-wheelers, three-wheelers, and four-wheelers, including passenger and commercial
vehicles.
d) Subsidies for EV Manufacturers: FAME I offered financial support to EV manufacturers for the
production of electric vehicles and their components. This included subsidies for the manufacturing
of electric vehicles, lithium-ion batteries, and charging infrastructure.
e) Pilot Projects and Demonstration Programs: FAME I facilitated the implementation of pilot
projects and demonstration programs for the testing and validation of electric vehicles and charging
infrastructure. This helped create awareness and build confidence among consumers and
stakeholders.
FAME II (2019-2022): Extended Coverage: FAME II expanded the scope of the policy by including
a wider range of electric vehicles. It provided incentives for electric two-wheelers, electric three-
wheelers, electric buses, and electric cars, including hybrid vehicles. Demand Incentives: FAME II
introduced demand incentives for electric vehicles to reduce the upfront purchase cost and
encourage consumer adoption. These incentives were offered in the form of direct subsidies,
reducing the price differential between electric and conventional vehicles. Charging Infrastructure:
FAME II focused on the development of robust charging infrastructure across the country. It
provided financial support for the establishment of public charging stations and also mandated
charging infrastructure in residential and commercial buildings. Phased Implementation:
FAME II was implemented in a phased manner to ensure a gradual transition towards electric
mobility. It defined specific timelines and targets for the adoption of electric vehicles and charging
infrastructure, allowing for a systematic and structured approach14.

Emphasis on Domestic Manufacturing: FAME II continued to encourage domestic manufacturing of

electric vehicle components, including lithium-ion batteries, electric motors, power electronics, and
charging infrastructure. The policy aimed to reduce import dependency and boost the domestic EV
industry. Other Initiatives: FAME II also supported various other initiatives such as fleet
electrification, public transportation electrification, and awareness campaigns to promote the
adoption of electric vehicles and create a conducive ecosystem for their growth.
The FAME policy, both FAME I and FAME II, has played a significant role in promoting electric
mobility in India. It has incentivized the purchase of electric vehicles, encouraged domestic
manufacturing, and facilitated the development of charging infrastructure. The policy has been
instrumental in fostering the growth of the electric vehicle industry and supporting India's efforts
towards sustainable transportation and a cleaner environment.

The National Biofuel Policy:

The National Biofuel Policy is a comprehensive framework introduced by the Government of India
to promote the production, blending, and utilization of biofuels in the country. The policy aims to
reduce dependence on fossil fuels, enhance energy security, promote sustainable agriculture, and
mitigate environmental concerns.
Here is a detailed note on the National Biofuel Policy:
Objectives:
14
NITI Ayog, E-Amrit, https://e-amrit.niti.gov.in/national-level-policy, Last accessed on 17th May, 2023.
 a) Energy Security: The policy aims to enhance energy security by reducing India's dependence on
imported crude oil through the promotion of domestically produced biofuels.
b) Rural Development: The policy promotes the use of biofuels as a means to generate employment
opportunities and income for farmers and rural communities, especially through the cultivation of
biofuel feedstock crops.
c) Environmental Sustainability: The policy encourages the use of biofuels as a cleaner and more
sustainable alternative to fossil fuels, leading to reduced greenhouse gas emissions and improved air
quality.
d) Waste Management: The policy focuses on the utilization of agricultural residues, organic waste,
and other non-edible feedstocks for biofuel production, promoting waste management practices and
reducing environmental pollution. Feedstock Development: The policy emphasizes the cultivation of
non-edible oilseed crops, such as jatropha, pongamia, and camelina, for biofuel production. It
encourages research, development, and deployment of improved varieties and cultivation practices
for feedstock crops to ensure sustainable and efficient production.
Biofuel Blending Targets: The policy sets specific blending targets for biofuels, mandating the
blending of ethanol with petrol and biodiesel with diesel. These targets are periodically revised and
increased to progressively increase the share of biofuels in the transportation sector.
Incentives and Subsidies: The policy provides various incentives and subsidies to promote the
production, distribution, and consumption of biofuels. This includes financial support for the
establishment of biofuel production units, tax benefits, research grants, and subsidies for feedstock
cultivation and procurement.
Regulatory Framework: The policy establishes a regulatory framework to govern the production,
quality standards, and blending of biofuels. It outlines the specifications for biofuel production and
quality control, certification mechanisms, and compliance requirements for blending obligations.
Waste-to-Biofuel Conversion: The policy encourages the conversion of agricultural residues,
organic waste, and other biomass sources into biofuels. It promotes technologies and processes such
as biogas production from agricultural waste and the use of advanced biofuel conversion
technologies like cellulosic ethanol and bio-methanol.
Research and Development: The policy emphasizes research and development in the field of
biofuels, including advanced biofuel technologies, feedstock improvement, process optimization,
and cost-effective production methods. It encourages collaboration between research institutions,
industry, and academia to foster innovation and technological advancements.
International Cooperation: The policy promotes international collaboration and partnerships for the
exchange of knowledge, technology transfer, and capacity building in the field of biofuels. It
encourages bilateral agreements and participation in international forums to share best practices and
learn from global experiences.
The National Biofuel Policy plays a vital role in promoting the sustainable and responsible use of
biofuels in India. By creating a supportive regulatory environment, providing incentives, and setting
blending targets, the policy aims to drive the adoption of biofuels and contribute to India's energy
security, rural development, and environmental sustainability.

National Green Hydrogen Mission:

Addressing the nation on the 75th Independence Day, Prime Minister Narendra Modi announced the
National Hydrogen Mission with an aim of making India a hub for the production and export of
green hydrogen. India is at a crucial juncture in terms of its energy landscape and green hydrogen
has a critical role to play to make the nation self-reliant and energy-independent. On January 4,
2022, the National Green Hydrogen Mission was approved by the Union Cabinet, chaired by the
Hon’ble Prime Minister Shri Narendra Modi.

Currently, India spends over $160 billion of foreign exchange every year for energy imports. These
imports are likely to double in the next 15 years without remedial action. With this approval, the
stage is set for India to become a global champion in green hydrogen15. The initial outlay for the
Mission will be Rs. 19,744 crore, including an outlay of Rs. 17,490 crore for the Strategic
Interventions for Green Hydrogen Transition (SIGHT) programme, Rs. 1,466 crore for Pilot
Projects, Rs.400 crore for Research & Development, and Rs. 388 crore towards other Mission
components. Ministry of New and Renewable Energy (MNRE) will formulate the scheme guidelines
for implementation of the respective components.

MISSION SUB-COMPONENTS

1. SIGHT Programme: Under the Strategic Interventions for Green Hydrogen Transition Programme
(SIGHT), two distinct financial incentive mechanisms – targeting domestic manufacturing of
electrolysers and production of Green Hydrogen – will be provided under the Mission.
2. Pilot projects: The Mission will also support pilot projects in emerging end-use sectors and
production pathways. Regions capable of supporting large scale production and/or utilization of
Hydrogen will be identified and developed as Green Hydrogen Hubs.
3. R&D Projects: Public-Private Partnership framework for R&D (Strategic Hydrogen Innovation
Partnership – SHIP) will be facilitated under the Mission. R&D projects will be goal-oriented, time
bound, and suitably scaled up to develop globally competitive technologies.
4. Skill Development: A coordinated skill development programme will also be undertaken under
the Mission16.

Mission Outcomes:

The Mission will result in the following likely outcomes by 2030:

15
NITI Ayog, “Harnessing Green Hydrogen”,
https://www.niti.gov.in/sites/default/files/2022-06/Harnessing_Green_Hydrogen_V21_DIGITAL_29062022.pdf,
16
PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION AND INFORMATION SERVICE (LARRDIS),
“National Green Hydrogen Mission”,
https://loksabhadocs.nic.in/Refinput/New_Reference_Notes/English/31012023_144911_102120474.pdf, last accessed
on 17th May, 2023.
 Development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per
annum with an associated renewable energy capacity addition of about 125 GW in the country.
 Over Rs. Eight lakh crore in total investments.
 Creation of over Six lakh jobs.
 Cumulative reduction in fossil fuel imports over Rs. One lakh crore.
 Abatement of nearly 50 MMT of annual greenhouse gas emissions.

MISSION BENEFITS:
 Making India a leading producer and supplier of Green Hydrogen in the world.
 Creation of export opportunities for Green Hydrogen and its derivatives.
 Reduction in dependence on imported fossil fuels and feedstock.
 Development of indigenous manufacturing capabilities.
 Attracting investment and business opportunities for the industry.
 Creating opportunities for employment and economic development.
Supporting R&D projects The Mission will support pilot projects in other hard-to-abate sectors like
steel, long-range heavy-duty mobility, shipping, energy storage etc. for replacing fossil fuels and
fossil fuelbased feedstocks with Green Hydrogen and its derivatives.

INDIA’S PROGRESS TOWARDS GREEN HYDROGEN

• Prime Minister Narendra Modi aims to transform India into an energy independent nation by 2047
where green hydrogen will play an active role as an alternate fuel to petroleum/ fossil-based
products.
• In 2020, India’s hydrogen demand stood at 6 million tonnes (MT) per year. It is estimated that by
2030, the hydrogen costs will be down by 50 per cent.
• The demand for hydrogen is expected to see a five-fold jump to 28 MT by 2050 where 80 per cent
of the demand is expected to be green in nature.
• Some of the prominent industrial mammoths such as Reliance Industries Limited (RIL), Gas
Authority of India Limited (GAIL), National Thermal Power Corporation (NTPC), Indian Oil
Corporation (IOC) and Larsen and Toubro (L&T) plan to foray into the green hydrogen space17.
RIL plans to become a net-carbon zero firm by 2035 and invest nearly INR 750 billion over the next
three years in RE.
• The government-led public sector undertaking (PSU), Indian Oil, is at the forefront of the green
hydrogen revolution. It is planning to setup India’s first green hydrogen unit for the Mathura
refinery, which will be used to process crude oil.
• National Thermal Power Corporation (NTPC), has recently set up a tender to establish a first-of-
its-kind hydrogen refuelling station to be powered entirely by renewables in Leh through a stand-
alone 1.25 MW solar system.

17
Strategic Investment research unit, India’s Green Hydrogen Policy,
https://www.investindia.gov.in/team-india-blogs/indias-green-hydrogen-policy, Last accessed on 20th May, 2023.
 • Two hydrogen refuelling stations have been established (one each at Indian Oil R&D Centre,
Faridabad and National Institute of Solar Energy, Gurugram).
• India has declared its ambition to become an exporter of hydrogen to Japan, South Korea, and
Europe18.
• Various hydrogen powered vehicles have been developed and demonstrated under projects
supported by Government of India. These include 6 Cell buses by Tata Motors Ltd., 50 hydrogen
enriched CNG (H-CNG) buses in Delhi by Indian Oil Corporation Ltd. in collaboration with Govt.
of NCT of Delhi, 2 hydrogen fueled Internal Combustion Engine buses (by IIT Delhi in
collaboration with Mahindra & Mahindra).
India’s distinct advantage in terms of low-cost renewable electricity, complemented by rapidly
falling electrolyser prices, can enable green hydrogen to be not just economical compared to fossil-
fuel based hydrogen but also compared to the green hydrogen being produced around the globe.
With proactive collaboration among innovators, entrepreneurs and government, green hydrogen has
the potential to drastically reduce CO2 emissions, fight climate change, and put India on a path
towards net-zero energy imports. It will also help India export high-value green products making it
one of the first major economies to industrialise without the need to ‘carbonise’.

Carbon Credits:
India, being a prominent member of various international treaties, is also determined to make
remarkable contributions for sustainable development and combat climatic changes in line with the
Paris Agreement. The Press Information posted on February 03, 2022, by Ministry of Environment,
Forest and Climate Change, sets out that in order to achieve and fulfil its COP-26 (Conference of
Parties 26) commitment, India is determined to
(i) reach 500GW non-fossil energy capacity by 2030;
(ii) meet 50 per cent of its energy requirements from renewable energy by 2030;
(iii) reduce total projected carbon emissions by one billion tonnes by 2030
(iv) reduce carbon intensity of the economy by 45 per cent by 2030, over 2005 levels and (v) achieve the
target of net zero emissions by 207019.

What is Carbon Credit and Carbon Offset?

One Carbon Credit or Carbon Offset represents one metric tonne of Carbon Dioxide that has either
been removed from the atmosphere or recycled. While Carbon Credits generally represent the
reduction in greenhouse gas emissions, Carbon Offsets represent greenhouse gas removal
undertaking recycling, Carbon Sequestration (explained below) and other similar activities.
The Government permits each industry to emit certain amount of Carbon Dioxide or other
greenhouse gases in the atmosphere. The organisation that achieves to release such gases in the

18
Ministry of Power, Ministry of Power notifies Green Hydrogen/ Green Ammonia Policy,
https://pib.gov.in/PressReleasePage.aspx?PRID=1799067, Last accessed on 20th May, 2023
19
Carbon credit: Understanding the concept, its evolutionand implications, ET Energy World,
https://energy.economictimes.indiatimes.com/news/renewable/carbon-credit-understanding-the-concept-its-evolution-
and-implications/99064759
limits lesser than the permitted threshold is issued with Carbon Credit Certificates. Conversely, the
organisation that emits greenhouse gases in excess of the permitted threshold either has to purchase
Carbon Credits from the organisations that have been issued the Carbon Credit Certificates – thereby
offsetting their excess emissions, or are levied with penalties by the Government. 20
Carbon Credits Certificate is the instrument issued by the Government or any such other authorised
agency, to an institution/ organisation that has either kept greenhouse gases out of the atmosphere or
have helped remove greenhouse gases from the atmosphere. The credits set out in the Certificate
represent the quantity of Carbon and other greenhouse gases so removed/ reduced and which, in
turn, are computed through advanced remote sensing data and other AI that have been developed
over the years.

What is the price of Carbon Credit?

India does not ascertain any explicit price to a carbon credit and relies on external factors that
determine value to each carbon credit. According to the World Bank, carbon pricing value can be
determined based on the external factors, such as, cost of fuel, emission trading scheme, tax levy,
excise duty, quality of project, international demand and supply of carbon etc. India, to boost its
carbon credit market, recognised Carbon as a commodity and declared trading of carbon credits on
Multi Commodity Exchange from January 04, 2008.
Thereafter, The National Commodity and Derivative Exchange also launched trading future contact
of Carbon Credits. However, the volume of such trades are stunt and the pricing of such contracts is
heavily influenced by variable external factors. It is only a matter of time and need of the hour that
thorough guidelines and systems to regulate carbon credit pricing should be set in place. 21

Evolution of Carbon Credits and its Trade Energy is fundamental to human development.
In an effort to save the planet from climatic breakdown, it was imperative to propagate the
devastation caused by increasing Carbon footprint and other greenhouse gas emissions in each part
of the world. In order to create a sustainable environment, Carbon was recognised as a tradeable
good at the United Nations Kyoto Protocol in 1997 and then again in 2005. This was also echoed
and further emphasised in the Paris Climate Agreement in 2015.
According to these agreements, a country is allowed to transfer and sell the excess capacity of
Carbon Credits collected by it to other countries/ institutions or organisations that do not have
enough Carbon Credits to meet its climate targets. The Carbon Trade Certificate encourages
businesses and nations to spend on environmentally friendly initiatives and activities. Each country
has a self-determined target of achieving Carbon Credits to fulfil its commitments. Anything
generated over and above this required limit, is permitted to be sold in international markets, where
the buyers are government/ industries that need to generate/ acquire more Carbon Credits to emit its
greenhouse gases and achieve its climate goals.
Carbon trading is done through a decentralised market where global private parties can exchange
Carbon Credit Certificates. Once a Carbon Credit is purchased and an offset against Carbon
20
Kavitha Yarlagadda, N, Carbon credits and India’s carbon market, https://www.deccanherald.com/science-and-
environment/carbon-credits-and-india-s-carbon-market-1163828.html, Last Accessed on 30th May 2023.
21
OECD, “Pricing Greenhouse Gas Emission”, https://www.oecd.org/tax/tax-policy/carbon-pricing-india.pdf, Last
accessed on 18th May 2023.
 emission is provided, that Credit is "retired" and cannot be sold or used again. From the year 2010
through 2022, India has issued 35.94 million Carbon Credits and also traded such Carbon Credits on
international global markets. In order to meet its COP-26 commitments, India now desires to focus
on creating a domestic market for trading Carbon Credits and also preserve Carbon Credits to fulfil
its Nationally Determined Contributions (NDCs, goals of India as commitment under the Paris
Agreement).

Developing Indian Laws on Carbon Credits:

In India (and actually worldwide) the Law concerning Carbon Credits is still evolving. In a
backdrop to achieve its COP-26 commitments, the (Indian) Energy Conservation Act, 2001 was
amended through the Energy Conservation (Amendment) Act, 2022 ("Act") 22, which has come into
force on and from January 1, 2023. This Act has empowered the Central Government, Ministry of
Power, to formulate and regulate the Carbon trading scheme and issue Carbon Credit Certificates
therefor. Under Section 14AA of the Act, the Central Government has been vested with the power to
issue or authorise an agency to issue Carbon Credit Certificates to the registered entities that are
compliant with the Carbon Credit Trading Scheme.
These Carbon Credit Certificates can be then sold to
(i) the organisations that emit more levels of Carbon than authorised;
(ii) the Government of India to fulfil its commitments; and
(iii) other nations, that need help to fulfil their commitments. However, currently there is less clarity on
the Carbon Trading Scheme and the authority that will issue Carbon Trading Certificates. Further,
many questions like setting-up of a trading platform, regulating such trading platform, etc. are still
ambiguous. The Act is futuristic and will play a critical role in achieving India's climatic goals and
monetising of the Carbon Credits. However it remains in the nascent stage and needs to be
developed in order to be effectively implemented.
A regularisation of the trading market, carbon credits pricing, carbon trading scheme, inclusive of
farmers in such scheme is currently work in progress and to solve the challenges it poses remains the
critical responsibility on the Indian Government. Legal Role With the evolving concept of Carbon
Credits, its trading and the evolving Laws with respect to the same, there is also an increase for the
need of legal assistance felt in this space. As mentioned above, there is currently a newfound
awareness of the scope of Carbon Credits in various sectors. Angel funding and collaborations are
being witnessed, where companies/ funds are willing to work at the grassroot level to educate the
farmers and assist them in earning Carbon Credits.
Likewise, for the other industries, approach to agencies specialised in providing green solutions is
being witnessed together with funding the start-ups for setting up the green solutions. All these
ventures hinge on documentation that ranges from basic due-diligence, to funding agreements,
agreements of distribution of Carbon credits and trading of these Carbon Credits, for which the
Parties need legal assistance However, with the Law on this topic still evolving, the Carbon Credit

22
The Energy Conservation (ammendment) Act, 2022, No. 19, Acts of Parliament, 2022, (India).
space and all documentation with respect thereto is also evolving. The inevitable future that Carbon
Credit holds, needs to be witnessed23.

Conclusion:

In conclusion, the Indian government has implemented several policies and programs to promote
renewable energy in the country. These initiatives have played a crucial role in accelerating the
transition towards a cleaner and more sustainable energy future. By focusing on renewable energy
sources, India aims to reduce its dependence on fossil fuels, mitigate environmental impacts,
enhance energy security, and drive economic growth. One significant aspect of the government's
efforts is the emphasis on carbon credits. The Clean Development Mechanism (CDM) under the
United Nations Framework Convention on Climate Change (UNFCCC) allows India to earn carbon
credits by implementing projects that reduce greenhouse gas emissions.
This provides a financial incentive for renewable energy projects, as the carbon credits can be traded
in international markets, generating additional revenue and attracting investments in clean energy
initiatives. Additionally, the introduction of the Green Hydrogen Policy highlights India's
commitment to fostering the development and utilization of green hydrogen as a clean energy
source. Green hydrogen, produced using renewable energy sources, holds immense potential for de
carbonizing sectors such as transportation, industry, and power generation. The policy aims to
facilitate the production, storage, and distribution of green hydrogen, creating a conducive
environment for investment, research, and technology development in this promising sector.
Overall, these policies and programs demonstrate India's proactive approach to promote renewable
energy and combat climate change. By incentivizing renewable energy generation, supporting
domestic manufacturing, encouraging innovation, and emphasizing the importance of carbon credits
and green hydrogen, the government is driving the growth of renewable energy and positioning
India as a global leader in the clean energy transition. However, continuous efforts, collaborations,
and advancements in renewable energy technologies will be essential to achieve the ambitious
renewable energy targets and create a sustainable and greener future for India.

23
IDR Online, "Climate mitigation: Can carbon credits ensure farmers don’t pay the price?",
https://idronline.org/article/climate-emergency/climate-mitigation-can-carbon-credits-ensure-farmers-dont-pay-the-
price/, Last accessed on 19th May, 2023.