Indo-Pacific Economic Framework

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

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

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

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).


Clean energy

Clean Energy: Issue 3 of 2023

S&R Associates presents the third issue of its quarterly roundup series on clean energy. Here, we cover updates from the period between the months of July and October of 2023.
This issue 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.
In addition, we provide an overview of carbon credits, including in respect of its market dynamics.


Innovative Constructions

Innovative Constructions: Assessing the Investment Viability of New Construction Technologies

Every year, Indians require 10 million new homes. At the same time, global markets are increasingly focused on sustainability, climate change and ESG-related goals. The confluence of such factors has created various opportunities to employ climate-responsive construction techniques, including through the use of eco-friendly and sustainable material. Relatedly, the interplay of energy-efficient solutions, green-certified buildings, targeted investments and financing, key legislative changes, government incentives and a coordinated regulatory framework, as well as increased digitalization, may change this ecosystem in fundamental ways.


Carbon credits in India

Carbon Credits: An Overview

The idea of carbon credits, including the establishment of a market for such credits, has generated significant global attention in recent years. While this idea is not new, it has become especially important today to understand what such credits entail and how these can benefit businesses – given the worldwide momentum towards ESG-related goals.
Carbon market transactions involve the purchase of emission rights from entities which have the technical and/or economic ability to reduce emissions. India’s Carbon Credit Trading Scheme, 2023 defines a ‘carbon credit’ to mean a value assigned to a reduction, removal or avoidance of emitted greenhouse gases amounting to one metric ton of CO2 or its equivalent. Accordingly, certificates may be issued by the government under the newly amended Energy Conservation Act, 2001.
In regulated carbon markets, each registered/obligated entity may be allotted a certain number of credits. Those that produce fewer emissions than the number of credits issued by the government (or an authorized agency) may enjoy a surplus. Conversely, companies with older and/or less efficient operations may generate more emissions than their credit allocation. The latter category may then look to buy credits to balance their emissions, including on account of a regulatory mandate.
This exchange between buyers and sellers will establish the market price. If it is cheaper for an emitter to trade in, rather than control, emissions, they can buy credits. Those that find it feasible to reduce emissions at a cost less than the market price can sell. Emissions trading can thus transform the right to emit a pollutant into a tradable good and create economic incentives for reduction.


Clean Energy: Issue 2 of 2023

Clean Energy: Issue 2 of 2023

S&R Associates presents the second issue of its quarterly roundup series on clean energy. Here, we cover the period between the months of April and June, 2023.
Broadly, this issue comprises regulatory updates on renewable energy and electric vehicles, respectively, including central and state government notifications in this regard, India-related updates and international developments, as well as other miscellaneous items.
In addition, separate analyses with respect to the newly introduced carbon credit trading framework in India provide an overview of the country’s proposed carbon market. Lastly, we discuss the advisability of green hydrogen certification in India.


Renewable Energy

Renewable Energy: Issue 1 of 2023

India appears to be on the right track with respect to its ambitious goals and determined pivot towards renewable energy. Indeed, the country has positioned itself as one of the most attractive destinations for renewable energy projects in the world.
In light of such developments, we at S&R Associates are happy to present a quarterly roundup (January to March 2023) on renewable energy, including regulatory updates and legal insights on some key issues.


Navigating BRSR

Navigating BRSR: Concerns and Opportunities  

In February, SEBI released a consultation paper on disclosures, ratings, and investing related to ESG, pursuant to which an assurance-driven reporting regime based on key ESG attributes (“BRSR Core”) may be introduced soon.
BRSR Core is intended to represent a focused subset of the Business Responsibility and Sustainability Reporting (“BRSR”) framework, which SEBI had introduced in May 2021 as a voluntary disclosure regime in lieu of the erstwhile Business Responsibility Reporting (“BRR”) paradigm. The main motivation behind introducing the BRSR framework was to ensure quantitative, standardized disclosures on ESG-linked parameters. While until FY 21-22, the top 1,000 listed companies in India by market capitalization could make disclosures under this framework on a voluntary basis, such disclosures are compulsory from FY 22-23.
This article provides an overview of category-wise BRSR compliance requirements.  Further, it highlights some of the benefits and opportunities, along with potential legal risks, associated with such disclosures. The article also discusses some of the concerns and innovations related to the BRSR Core framework, including in light of SEBI’s proposals with respect to adjusting intensity ratios for country-level purchasing power parity and extending disclosure requirements to corporate supply chains.


Carbon Market

Carbon Market: Certification is the Missing Link in India’s Green Hydrogen Ambitions

Given India’s climate ambitions, a national transition to green hydrogen (“GH”) appears to be a pressing requirement. In August 2021, India announced the launch of its ‘National Hydrogen Mission’ (“NHM”) to scale up GH production. In February 2022, the Ministry of Power (“MoP”) announced the Green Hydrogen Policy (“GHP”) as the first tranche of instruments to bolster efforts in this direction. Among other elements, the GHP included an understanding that the renewable energy (“RE”) consumed for the production of GH will count towards renewable purchase obligations (“RPO”) of the consuming entity. This January, India’s Union Cabinet approved the National Green Hydrogen Mission (“NGHM”). In February, the Budget confirmed an outlay of almost INR 200 billion for NGHM. While the NGHM aims to develop policies for establishing a viable GH ecosystem, a framework of standards and regulations is expected to be formulated soon.
However, given the government’s accelerated focus on transforming India into a global GH hub, it is unfortunate that the country does not yet have a supporting framework with respect to hydrogen certification. The proposed deployment and uptake of Indian GH will depend on the widespread acceptance of instruments which guarantee its origin. In addition, such a framework can facilitate the trading of hydrogen as a commodity on national and international markets. While national certification processes must align with international markets, tracking systems will be necessary to trace attributes across the value chain, including for the purpose of creating transparency and boosting demand. Furthermore, a robust certification framework can increase investments in RE for the purpose of producing low-carbon hydrogen.
The GH value chain includes production, transportation, storage, and end-use. Each of these activities involves several underlying processes, every one of which requires the use of energy – thus leading to emissions. These emissions can vary depending on the material and technology used. Although color schemes are popular to characterize different types of hydrogen, color-coding by itself fails to provide meaningful details about associated emissions. For instance, even post-production, GH can be involved in significant emissions by the time it reaches an end-use facility, especially if the energy required for constituent processes is not fully supplied through renewable sources.
While RE certificates (“RECs”) help consumers identify the renewable attributes of the energy purchased/used, being able to have the origin credibly certified enables them to make claims about a certain volume of RE generated. For the purpose of GH certification, in addition to RECs, India could draw on tracking templates for other energy products (e.g., biofuels). Further, given that hydrogen is not a primary source of energy (only a carrier), creating a proper link between GH certificates and RECs will be important. Such linkage is additionally necessary to avoid double-counting. Nevertheless, since GH markets are still at a nascent stage, a transitional period could be allowed during which the electrolyzers used to produce GH are enabled to utilize power from existing renewable plants, backed by RECs.