Tag: Clean Energy

Carbon Border Adjustment Mechanism

Implementation of the EU’s Carbon Border Adjustment Mechanism and its Implications

Insights | January 9, 2025 | Practice Area: , , , , ,

The European Union’s Carbon Border Adjustment Mechanism (“CBAM”), applicable to imports from ‘third countries’ (i.e., non-EU countries), endeavors to impose a price on emissions in respect of the production and supply of carbon-intensive goods. By ensuring that a price is paid for such embedded emissions, the CBAM aims to make the carbon price of imports equivalent to that of domestic production, especially when third countries do not appropriately impose such price.
Although the CBAM has been mainly presented as a climate measure, it may also end up operating as a unilateral trade restriction designed to protect EU manufacturing. Several countries, including India, have labeled the CBAM as protectionist. While the global implications of the CBAM appear to be diverse, certain countries, including developing and newly industrialized nations, have claimed to be the worst hit, while developed countries are likely to have less carbon-intensive production processes.
The CBAM’s compliance requirements are expected to reduce the profits of Indian exporters in key sectors. Indian manufacturers from key trade-exposed industries (including those that are energy-intensive) are further poised to incur an increase in fuel costs, leading to a decrease in export earnings.
While India has discussed retaliatory measures, it is also pursuing the option of getting its Carbon Credit Trading Scheme, 2023 recognized by the EU and aligning it with the CBAM. Separately, the EU and India are engaged in talks on a proposed Free Trade Agreement, where India has raised concerns about the CBAM being similar to non-tariff barriers.
However, consistent with India’s own goals, the CBAM could also offer potential synergies, including in terms of green hydrogen partnerships and increased renewable energy deployment. Indian producers and exporters could view the CBAM as an opportunity to scale up sustainability-driven practices, including to enhance their positioning in a globally competitive market. Going forward, while carbon reporting and emissions monitoring will be essential, Indian companies should also consider investing in appropriate R&D, including with respect to emerging technologies.

sustainable finance

SEBI’s New Framework for Sustainable Finance: A Review Beyond Environmental Sustainability

Insights | December 24, 2024 | Practice Area: , ,

In order to expand the asset class for which Indian entities can issue and list debt securities with a purpose of using the proceeds for developing sustainable projects, the Securities and Exchange Board of India recently amended the Securities and Exchange Board of India (Issue and Listing of Non-Convertible Recently Securities) Regulations of 2021 (“NCS Regulations”) on December 11, 2024. Previously, the framework under the NCS Regulation only covered issuances of green debt securities. The amendment has introduced the concept of ESG debt securities, which now includes a framework for issuances of social bonds, sustainability bonds, sustainability linked bonds and green debt securities under its ambit.
This note discusses the amendment in light of India’s commitment towards reducing its intended nationally determined contributions together with the implications for listed issuances of the ESG debt securities by Indian corporates to potential domestic and foreign investors as well as highlights the gaps in the current form of the NCS Regulations.

clean energy

Clean Energy: Issue 3 of 2024

Quarterly Roundups | November 13, 2024 | Practice Area: , ,

Issue 3 of 2024 of our Quarterly Roundup Series on Clean Energy covers the period between July and September 2024 and tracks key regulatory developments at both central and state levels in solar and wind generation, green hydrogen/ ammonia production, EVs, tariffs, connectivity and other miscellaneous updates.

Green Hydrogen in India

Landscape for Green Hydrogen in India

Insights | September 19, 2024 | Practice Area: , , , ,

Hydrogen is the most abundant element in the universe and has the potential to store tremendous amounts of energy. Under the right circumstances, it can be a viable alternative to fossil fuels and can significantly contribute to decarbonization. Accordingly, in India’s quest to decarbonize and achieve net zero emissions by 2070, it seeks to manufacture and deploy Green Hydrogen (“GH2”), and its derivates such as Green Ammonia. Policy initiatives including the National Green Hydrogen Mission (“NGHM”), and the Green Hydrogen Certification Scheme (“GHCI”) create a framework, while incentivizing investments in the sector by providing financial incentives and creating robust and transparent monitoring systems. Other key consideration for investors would be the ease of financing and longevity of business operations, dependent in part on the regulatory framework. The availability of low cost renewable energy and skilled workforce also show good promise to transform the country’s energy infrastructure and position it as an export hub for international trade. In this backdrop, investors are keenly looking at the landscape for GH2 in India to meet both financial and ESG goals.

esg considerations

Climate Change and ESG Considerations in India’s AI-Driven Future

Insights | August 14, 2024 | Practice Area: , , ,

As AI continues to transform industries in crucial ways, the training of large AI models remains highly energy- and resource-intensive, resulting in significant emissions and waste.
For countries and companies which have ambitious net-zero goals, balancing AI ambitions with existing decarbonization strategies is important. As India accelerates its journey towards becoming a global economic powerhouse, it may want to address the environmental implications of increased AI deployment, including by regulating AI with the aim of making increased adoption sustainable. Where companies are concerned, investing in ‘green AI’ will not only benefit the environment but may also enhance their ESG profiles. Going forward, the integration of climate considerations into AI policy is likely to become an important element of responsible AI development.

Clean Energy: Issue 2 of 2024

Quarterly Roundups | August 12, 2024 | Practice Area: , ,

Pursuant to significant regulatory developments in the period between January and March 2024, as discussed in our previous clean energy quarterly update (Issue 1 of 2024), Issue 2 tracks and analyzes key regulatory developments between the months of April and June 2024, including in respect of the approved/revised list of manufacturers and models (related to solar photovoltaic modules and wind turbine models, respectively), rooftop solar projects, the optimal utilization of power generating stations, the National Green Hydrogen Mission, the determination of fees and charges to be collected by regional load dispatch centers, deviation settlement, EV charging infrastructure, quality control standards for electrical equipment, biomass utilization, the electricity grid code, and renewable energy tariff determination.

In addition, Issue 2 of 2024 tracks and discusses key regulatory developments across states, such as those with respect to open access (including green energy open access), consumer rights, resource adequacy, renewable purchase obligations, peer-to-peer energy transactions, and battery energy storage systems. 

biodiversity and climate

Safeguarding Biodiversity or Mitigating the Impact of Climate Change: A Novel Dilemma

Insights | July 29, 2024 | Practice Area: , ,

In a landmark judgement delivered in March 2024, in MK Ranjitsingh & Others vs. Union of India & Others, the Supreme Court of India sought to balance two goals which it considered “equally crucial” – the conservation of a “critically endangered species”, the Great Indian Bustard, and the conservation of the environment.
The Supreme Court has proposed a way ahead to address the dilemma presented to it. Balanced and prompt follow up action will be critical to approach both biodiversity and climate goals in a meaningful way.

Indo-Pacific Economic Framework

The Indo-Pacific Economic Framework for Prosperity: Opportunities for Indian Companies

Insights | June 25, 2024 | Practice Area: , , , , ,

Along with 13 other countries (including the US, Japan, Singapore, South Korea and Australia), India has joined the Indo-Pacific Economic Framework for Prosperity (“IPEF”). Representing 40% of global GDP and almost 30% of international trade in goods and services, the IPEF is expected to promote economic activity, investment, and sustainable growth in the Indo-Pacific region. It also aims to address emerging economic challenges – such as those related to trade, supply chains, clean energy (including green infrastructure), taxation and anti-corruption.
While agreements in respect of a clean economy and a fair economy, respectively, were reached in June 2024 at the IPEF Ministerial meeting held in Singapore, the IPEF agreement on supply chains, signed in November 2023, came into force earlier this year (February 2024).
The IPEF presents a unique opportunity for Indian companies to enhance competitiveness and expand their markets. By actively engaging with the framework, businesses in India can position themselves as key players in the dynamic Indo-Pacific landscape. Further, the IPEF presents an opportunity for India to strengthen economic cooperation with the US – which relationship, in turn, is likely to prove valuable for both Indian and American companies.

Clean Energy

Clean Energy: Issue 1 of 2024

Quarterly Roundups | May 15, 2024 | Practice Area: , ,

Issue 1 of 2024 of S&R’s Quarterly Roundup Series on Clean Energy covers the period between January and March 2024. The covered period witnessed several transformational developments, such as those in respect of the Electricity Rules, 2005 involving the delicensing of transmission lines and capping of open access charges; a renewed focus on distributed/decentralized solar energy; requirements related to the approved list of manufactures and models in connection with solar photovoltaic modules; green hydrogen policies at the state level (e.g., Uttar Pradesh); and incentive schemes and guidelines for pilot projects across key sectors (like shipping, steel and transport) related to the production and supply of green hydrogen and green ammonia, along with detailed scheme guidelines for the manufacture of electrolyzers, the setting up of hydrogen hubs, as well as on research and development and skilling.

Clean Energy

Clean Energy: Issue 4 of 2023

Quarterly Roundups | January 29, 2024 | Practice Area: , ,

S&R Associates presents the fourth issue of its quarterly roundup series on clean energy, covering the months of November and December 2023.
Issue No. 4 comprises regulatory updates on renewable energy and electric vehicles, respectively, including central and state government notifications in this regard, along with India-related updates and international developments from within the reviewed period.
In addition, Issue No. 4 contains a note on the investment viability of innovative and/or clean construction technologies, as published in a Knowledge Brief of the Asia Pacific Real Estate Association (APREA).