• A recent report released by the Centre for Science and Environment (CSE) mentions that the Perform, Achieve and Trade (PAT) scheme introduced in 2008 is not effective.
  • The PAT scheme was introduced to improve energy efficiency in Indian industries and consequently reduce greenhouse gas.
  • The report attributed the inefficiency of the scheme to non-transparency, unfastened targets and neglected deadlines.

Important points:

  • It is a market-based mechanism to further accelerate as well as incentivize energy efficiency in the large energy-intensive industries.
  • The Energy Savings Certificates (ESCerts) were introduced in India in 2011 under the PAT by the Bureau of Energy Efficiency (BEE) under the National Mission of Energy Efficiency.
  • NMEEE is one of the eight national missions under the National Action Plan on Climate Change (NAPCC) launched by the Government of India in the year 2008.
  • This market- based mechanism is facilitated through the trading of Energy Savings Certificates (ESCerts) which are issued to those plants who have overachieved their targets.
  • The underachievers are entitled to purchase ESCerts through two power exchanges – Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL).
  • Industries that take part in this scheme are referred to as designated shoppers (DC).
  • PAT covered about 13 energy-intensive sectors: Thermal power plants (TPP), cement, aluminium, iron and steel, pulp and paper, fertiliser, chlor-alkali, petroleum refineries, petrochemicals, distribution companies, railways, textile and commercial buildings (hotels and airports).

Way Forward

The energy reduction target should be made stringent in order to meet up with the global climate commitments with respect to greenhouse gas emission mitigation.


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