Amendment in S.O. 394 (E) for addition of Petrochemical Sub Sector and their threshold annual energy consumption reg

## Report on Amendment to Energy Conservation Act, 2001 **1. Executive Summary:** This report analyzes a notification amending the Energy Conservation Act, 2001, specifically concerning designated consumers. The amendment, dated September 7, 2022, broadens the definition of designated consumers to include Petrochemical manufacturing units based on their yearly energy consumption related to specific products. This aims to further reduce energy consumption within the petrochemical sector. The key finding is that certain Petrochemical manufacturing units are now classified as designated consumers, triggering obligations under the Energy Conservation Act. **2. Introduction:** This report provides an overview and analysis of the amendment to the Energy Conservation Act, 2001, as published in the Gazette of India on September 7, 2022. The analysis is based solely on the provided policy text and aims to inform affected industries about the key changes and their potential implications. **3. Policy Overview:** * **Original Policy:** The amendment refers to the initial notification S.O. 394E, dated the 12th March, 2007, which designated energy-intensive industries and other establishments as designated consumers. It also references a previous amendment, notification no. 3600 E dated the 15th November 2017, which included Petrochemical units Gas cracker, Naphtha cracker or both having energy consumption of 1,00,000 metric tonne of oil equivalent per year and above. * **Core Objective(s):** The core objective, inferred from the text, is to promote energy conservation by identifying and regulating energy consumption within specified industries and establishments. The amendment aims to further this objective by extending the scope to include a wider range of petrochemical manufacturing activities. **4. Background and Rationale:** The amendment is likely driven by the need to address significant energy consumption within the petrochemical industry. By including specific Petrochemical manufacturing units based on their energy consumption related to specific products, the government aims to encourage greater energy efficiency and conservation within these sub-sectors. The text implies a desire to target specific areas within petrochemical manufacturing where significant energy savings are possible, beyond just large cracker units. **5. Key Provisions / Changes:** This amendment specifically changes the definition of "designated consumers" under the Energy Conservation Act, 2001. * **What is being changed:** Subparagraph 13 of the original order is being appended with a new subparagraph 14. * **New Rule/Provision:** Subparagraph 14 adds Petrochemical manufacturing units to the list of designated consumers, provided they meet minimum yearly energy consumption thresholds for specific products. The table below summarizes the threshold: | S. No. | Product Manufacturing units | Total Threshold Energy consumption in Metric Tonne of Oil Equivalent (MTOE) per year and above. | | :----- | :-------------------------- | :------------------------------------------------------------------------------------------- | | 1 | Fibre Intermediates | 50,000 | | 2 | Polymers | 10,000 | | 3 | Detergent Intermediates | 9,000 | | 4 | Performance Plastics | 3,000 | | 5 | Other Petrochemical products | 6,000 | | 6 | Synthetic Rubbers | 15,000 | | 7 | Aromatics | 20,000 | * **Difference/Effect:** The effect of this change is that Petrochemical manufacturing units producing the listed products, exceeding the specified MTOE thresholds, will now be classified as designated consumers and subject to the obligations under the Energy Conservation Act, 2001. These obligations likely involve energy audits, setting energy consumption norms, and implementing energy efficiency measures. **6. Target Audience and Stakeholders:** The primary target audience is Petrochemical manufacturing units involved in the production of: Fibre Intermediates, Polymers, Detergent Intermediates, Performance Plastics, Other Petrochemical products, Synthetic Rubbers, and Aromatics. Those units exceeding the specified energy consumption thresholds are directly affected. Stakeholders also include the Bureau of Energy Efficiency (BEE), the Ministry of Power, and potentially energy service companies. **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Central Government, in consultation with the Bureau of Energy Efficiency (BEE), is responsible for implementing and enforcing this amendment. * **Timelines or Procedures:** The text does not specify any immediate timelines or procedures. However, affected petrochemical units will likely be required to comply with existing regulations and guidelines under the Energy Conservation Act, 2001, including conducting energy audits and implementing energy efficiency measures. The BEE will likely play a key role in providing guidance and monitoring compliance. **8. Expected Outcomes / Impact of Changes:** The likely intended outcome of this amendment is a reduction in energy consumption within the specified segments of the petrochemical industry. By designating these units as consumers, the government aims to incentivize investments in energy-efficient technologies and practices, leading to lower energy intensity and reduced greenhouse gas emissions. The impact will be felt through increased compliance costs initially, followed by potential cost savings through reduced energy consumption and improved resource management. **9. Conclusion:** The amendment to the Energy Conservation Act, 2001, broadens the scope of designated consumers to include specific Petrochemical manufacturing units based on product type and energy consumption. This signifies the government's continued commitment to promoting energy conservation and efficiency across various industries. Affected Petrochemical manufacturers must assess their energy consumption patterns and prepare to comply with the regulations and guidelines under the Energy Conservation Act, 2001. This amendment is a significant step towards achieving greater energy efficiency within the petrochemical sector.

Key Entities Referenced