The Energy Conservation Act, 2001 (Act No. 52 of 2001) is an Act of the Indian Parliament enacted on September 29, 2001, to provide a legal framework for the efficient use and conservation of energy. It came into practice from March 1, 2002, to address the problem of increasing energy consumption, the depletion of natural resources, and the need to reduce the energy intensity of the Indian economy.
The Act's core mechanism is the establishment of the Bureau of Energy Efficiency (BEE) on March 1, 2002, which is responsible for its implementation. Key provisions empower the Central Government to enforce mandatory measures, including setting Standards & Labelling for equipment and appliances, and specifying energy consumption norms for large energy users called designated consumers. It also mandates the implementation of Energy Conservation Building Codes (ECBC) for commercial buildings. The Act introduced a market-based mechanism by allowing the issuance of Energy Savings Certificates (ESCerts) to designated consumers who exceed their efficiency targets.
The Act was significantly amended by the Energy Conservation (Amendment) Act, 2022, which received the President's assent on December 19, 2022, and came into force on January 1, 2023. This amendment expanded the scope of the Act to include energy consumption standards for vehicles and vessels and empowered the Central Government to specify a carbon credit trading scheme. It also mandated that designated consumers meet a proportion of their energy needs from non-fossil sources, aligning the Act with India's climate change commitments made at COP-26.