Environmental Law 2020

Last Updated November 13, 2020

India

Law and Practice

Authors



J. Sagar Associates is a leading national law firm in India. It comprises 320 professionals operating out of seven offices: Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai and New Delhi. For over 25 years the firm has provided legal representation, advice and services to leading international and domestic businesses, banks, financial services providers, funds, governmental and statutory authorities, and multilateral and bilateral institutions. It is recognised as the Indian law firm that has led – and continues to lead in India – a paradigm shift towards institutionalising and professionalising law firm ownership and management. This contemporary and modern approach is reflected in its work.

Constitutional and Legal Framework

The Constitution of India (the “Constitution”) provides a holistic foundation for Indian environmental law comprising Article 48-A (directive principles of state policy requiring the state to endeavour to protect and improve the environment and safeguard forests and wildlife) and Article 51A(g) (fundamental duty of citizen to protect and improve the natural environment including forests, lakes, rivers and wildlife). The Supreme Court of India has interpreted the fundamental right to life guaranteed under Article 21 of the Constitution to include the right to live in a clean environment.

The legislative framework for environmental protection comprises several federal-level environment protection laws, including the following.

  • The Water (Prevention and Control of Pollution) Act, 1974 (“Water Act”), which provides for prevention and control of water pollution and the maintaining or restoration of the wholesomeness of water.
  • The Air (Prevention and Control of Pollution) Act, 1981 (“Air Act”), which provides for prevention, control and abatement of air pollution.
  • The Environment (Protection) Act, 1986 (EPA), which provides for protection and improvement of the environment. Various notifications/rules/regulations have been issued under the EPA concerning, amongst others, emissions reduction, management of waste, regulation of activities in coastal zones, ozone-depleting substances, et al.
  • The Forest (Conservation) Act, 1980 (“Forest Act”), which sets out provisions relating to the conservation of forests (read with the Compensatory Afforestation Fund Act, 2016).
  • The Wildlife (Protection) Act, 1972, which provides for protection of wild animals, birds and plants.
  • The Public Liability Insurance Act, 1991 (PLI), which provides for public liability insurance in order to provide immediate relief to persons affected by accidents occurring while handling hazardous substances.
  • The Biological Diversity Act, 2002, which provides for conservation of biological diversity, sustainable use of its components, and fair and equitable sharing of the benefits of using biological resources.
  • The National Green Tribunal Act, 2010, which provides for establishment of the National Green Tribunal (NGT); see also 2.1 Key Regulatory Authorities.

International Commitments

The Constitution requires the Indian state as a matter of policy to endeavour to maintain just and honourable relations between nations, and also to foster respect for international law and treaty obligations, et al (Article 51).

On the international front, India was a participant in the United Nations Conference on the Human Environment held at Stockholm (1972), which called upon the countries to exert common efforts to preserve and improve the human environment. Indeed, the 42nd Amendment to the Constitution of India inserting articles 48-A and 51A, was enacted pursuant to India being party to the Stockholm Declaration.

India is party to the United Nations Framework Convention on Climate Change (1994), and has, pursuant to the Paris Agreement thereunder, committed to reduce its greenhouse gas (GHG) emissions, increase the non-fossil share in its cumulative power generation capacity, and create an additional cumulative carbon sink. See 12.2 Targets to Reduce Greenhouse Gas Emissions for further details in this regard.

Policy Framework

The present national policies for environmental management are contained in the following instruments.

The National Forest Policy, 1988

Against the backdrop of serious forest depletion over the years, this policy recognises the imperative for forest conservation measures that include preservation, maintenance, sustainable utilisation, restoration, and enhancement of the natural environment.

National Conservation Strategy and Policy Statement on Environment and Development, 1992

This statement was adopted so as to lay down guidelines that would help weave environmental considerations into the fabric of India's national life. The strategy was intended to resolve frequent conflicts that arise between environmental concerns and developmental pursuits which have a direct bearing on the society.

Policy Statement on Abatement of Pollution, 1992

This statement targets a reduction in the local concentration of pollutants in complex industrial areas, ensuring compliance with specific standards, and biological treatment of waste water. The aim of the policy is to indicate to both consumers and industrial establishments that certain costs have to be incurred by them for use of the country’s natural resources.

The National Environment Policy, 2006

This policy promotes sustainable development, conservation of critical environmental resources and its efficient use, intra-generational and inter-generational equity and integration of environmental concerns in economic and social development. It envisages that the federal, state and local governments will collectively implement the broader policy set out in this policy.

Governing Principles

The following principles, laid down and enforced by the Supreme Court, underpin environmental protection in India.

Sustainable development

Development which meets the needs of the present without compromising the ability of the future generations to meet their own needs.

Precautionary principle

Environmental measures by authorities must anticipate, prevent and tackle the causes of environmental degradation.

"Polluter pays" principle

A polluter is required to bear the remedial or clean-up costs as well as the amount payable to compensate the victims of pollution.

Absolute liability

Where an enterprise in engaged in a hazardous and inherently dangerous activity and harm results due to an accident in the operation of such activity, the enterprise is strictly and absolutely liable to compensate those affected. Such liability is not subject to any exceptions available under the tortious principles of strict liability.

Public trust

The state is the trustee of all natural resources, which are by nature meant for public use and enjoyment. By implication, the state is under a legal duty to protect these natural resources.

Intergenerational equity

Humans have a responsibility to safeguard natural resources for the benefit of the present and future generations through careful planning and management.

A mix of executive, statutory and judicial authorities are responsible for environmental policy and enforcement. The key authorities are as follows.

Ministry of Environment, Forest and Climate Change

This central government ministry is responsible for formulating policy and administering legislation with regard to the environment. The Ministry is also empowered under the EPA to take measures it deems necessary or expedient for protecting and improving the quality of the environment and preventing, controlling and abating environmental pollution, including laying down standards for emission or discharge of environmental pollutants from various sources.

Pollution Control Boards

Constituted pursuant to the Water Act, pollution control boards at the central and state levels (SPCBs) are responsible for setting effluent standards, implementing pollution prevention programmes, granting permits, advising the government, as well as conducting inspections as required to ensure compliance with the Air Act, Water Act, and such of the rules/regulations/notifications issued under the EPA in respect of which the boards have been designated as the concerned authority.

National Green Tribunal

The NGT is tasked with effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources, including enforcement of any legal rights relating to the environment. Its jurisdiction extends to civil cases involving a substantial question relating to the environment, where such question arises out of the implementation of the laws referred to in 1.1 Key Environmental Protection Policies, Principles and Laws, save the Wildlife (Protection) Act, 1972.

Writ Courts

The Supreme Court (the apex judicial body in India) and High Courts (the apex judicial authorities in the states) exercise original and appellate jurisdiction over environmental matters. Indeed, the Supreme Court has taken to monitoring environment-related concerns throughout the country, and, to this end, has – in the exercise of its extraordinary jurisdiction – issued various directions and guidelines to the central and state governments.

The legal and regulatory framework sets out various offences in relation to discharging and/or emitting effluents in contravention of stipulated norms or the requirements of law. In this regard, authorities have the right to enter any place in order to examine any plant, record, register, document or any other material object or for conducting a search of any place in which there is reason to believe that an offence has been, or is being, or is about to be committed and for seizing any such object if there is reason to believe that it may furnish evidence of the commission of an offence.

Environmental Permits

The legal and regulatory framework for environmental protection prescribes various approvals that have to be obtained for establishing, operating or undertaking certain activities. Key permits include the following.

Consent to establish/operate

Prior consent of the SPCB has to be obtained in order to establish and operate any industry or plant in a designated air pollution control area, or which is likely to discharge sewage or trade effluent into (i) a stream, (ii) well, (iii) sewer, or (iv) on land. In this regard, the importance of these permits has been expounded upon by the NGT (Krishan Kant Singh v Triveni Engineering Industries Ltd., OA No. 317 of 2014) in the following terms:

The consent is contemplated at both stages i.e. at the stage of establishing such industry, plant, etc. as well as at the time of operationalization of the plant. The industry so established would carry on such activity only by adhering to the conditions of the order of the consent and its emission and discharge of effluent or sewage has to be strictly within the prescribed parameters. Thus, the law imposes dual obligation upon the person or industry. Firstly, it has to take the consent of the Board and secondly, it must ensure adherence to the prescribed parameters and the law in force while carrying on its activity. In either event, the responsibility is exclusively that of the person or industry to comply with the law and to demonstrate at all relevant times that it continues to comply with those directions and laws in force.

Environmental approvals

Various approvals have to be obtained under the notifications/rules issued under the EPA, including "prior environmental clearance" for designated sectors/industries, as well as approvals regarding use of hazardous waste, development in coastal area, et al.

Forest clearance

Permission has to be sought from the central or state government, as the case may be, for use of any forest land for any non-forest purpose.

Wildlife clearance

Clearance has to be sought from the National Board for Wildlife for any non-forest activity to be undertaken in a wildlife sanctuary, elephant/tiger reserve or national park.

Procedure for Obtaining Permits

An application has to be made in the prescribed format to the concerned authority seeking the approval. The application must contain requisite information as may be stipulated (including, in particular, the nature of activity proposed to be or being undertaken), along with necessary filing fees.

Following such application, the authority may inspect the applicant’s facility for the purpose of determining the conditions of approval. Approvals, once granted, may impose one-time or continuing obligations on the applicant, breach of which renders the approval liable to be revoked or cancelled.

In case of the approvals under the Air Act and Water Act, appeals lie before an appellate body constituted by the state government. Appeals from such body lie before the NGT (and thereafter the Supreme Court). In case of the EPA and the Forest Act, the appeal against the granting authority’s decision lies directly with the NGT (and thereafter the Supreme Court).

As noted in 3.1 Investigative and Access Points, the legal and regulatory framework contains penal provisions in relation to non-compliance with statutory obligations. Punishments for non-compliance include fines, imprisonment, or both, the quantum of which escalate for repeat/continuing offences. A series of judgments premised on the "polluter pays" principle have established this regime.

Courts in India have established a higher standard of "absolute and strict liability" than what was laid down in Rylands v Fletcher, (1868) L.R. 3 H.L. 330, which may be summed up as:

  • once an activity is hazardous or inherently dangerous, the person carrying on such activity is liable to make good the loss caused to any other person by his or her activity irrespective of the fact whether they took reasonable care while carrying on the activity, and without recourse to any of the defences available under the Rylands v Fletcher doctrine of strict liability;
  • such persons are bound to take all necessary measures to remove the pollutants in the affected area;
  • the rationale for this approach is thus that it is the person carrying on the activity alone that has the resources to discover and guard against hazards or dangers (and not the person affected thereby);
  • the measure of compensation is correlated to the magnitude and capacity of the person since such compensation must have deterrent effect – the larger and more prosperous the person, the greater must be the amount of compensation.

With regard to environmental incidents or damage, the law ordinarily imposes sanctions or penalties on the current owner of a facility. However, it is market practice, when purchasing an asset or facility, for the buyer to seek an indemnity from the seller to the extent of any and all losses, damages and costs that may be incurred by the buyer on account of environmental non-compliances resulting from any acts or omissions of the seller. Further, the seller will ordinarily represent and warrant that environmental laws have been complied with, failing which the seller is liable for damages.

Please see 4.1 Key Types of Liability and 9.1 Civil Claims.

If an offence is committed by a company, in addition to the company, every person who, at the time the offence was committed, was in charge of and responsible to the company for the conduct of its business is deemed to be guilty of the offence and is liable to be proceeded against and punished accordingly. However, such person is not liable if they prove that the offence was committed without their knowledge or that they exercised all due diligence to prevent such offence.

If it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such officer is also deemed guilty of the offence and is liable accordingly.

A parent company is not ordinarily liable for environmental damage or breach of environmental law on the part of its subsidiary, save for instances where the "corporate veil" is lifted to dissolve the separation between a company and its shareholders. Please see 6.1 Liability for Environmental Damage or Breaches of Environmental Law with regard to the liability of companies.

Please see 6.1 Liability for Environmental Damage or Breaches of Environmental Law with regard to the liability of directors/officers.

It is market practice to obtain directors' and officers’ insurance to cover the legal costs and liabilities that may be brought against such individuals. The coverage, scope and exclusions of such insurance vary from insurer to insurer.

Lenders are not ordinarily held liable for environmental damage or breaches of environmental law. However, as a precautionary measure, lenders ordinarily stipulate that any environmental non-compliances have to be rectified as a condition precedent to draw-down, and that non-compliance with environmental laws will constitute a material breach on the part of the borrower under the financing agreements.

Please see 8.1 Financial Institutions/Lender Liability.

An application may be filed before NGT seeking compensation for victims of pollution and other environmental damage, for restitution of property damaged, and for restitution of the environment for such area or areas.

Such an application may be filed by a person who has sustained injury or whose property has been damaged, legal representatives of any person who has died owing to such damage as well as any person aggrieved (including any representative body or organisation).

The heads under which compensation or relief for damage may be claimed include death, disability (whether permanent, temporary, total, or partial) or other injury or sickness, loss of wages due to such disability, medical expenses incurred for treatment of injuries or sickness, damage to private property, and loss of business or employment or both.

Please see 4.1 Key Types of Liability.

As noted in 9.1 Civil Claims, applications for compensation may be made before the NGT by any representative body or organisation on behalf of affected victims.

There have been a number of landmark judicial pronouncements in the evolution of India’s environmental jurisprudence. Amongst them are:

  • MC Mehta and Anr v Union of India and Ors, 1987 SCR (1) 819 (popularly known as the Oleum Gas Leak case), in which the Supreme Court of India evolved the concept of "absolute liability" (see 1.1 Key Environmental Protection Policies, Principles and Laws and 4.1 Key Types of Liability), and recognised the right to a clean environment as being a part of the Fundamental Right to Life (see 1.1 Key Environmental Protection Policies, Principles and Laws);
  • TN Godavaraman Thirumulpad v Union of India and Ors, in which the Supreme Court has, through the writ of continuing mandamus, issued a series of orders since 1995 with respect to forest conservation and other environmental issues;
  • Samir Mehta v Union of India & Ors., O.A. 24 OF 2011, wherein the NGT directed a polluter to pay INR100 crore to the central government as compensation for the costs incurred in cleaning up an oil spill;
  • Indian Council for Enviro-Legal Action v Union of India and Ors., (1996) 5 SCC 281, in which the Supreme Court recognised the principle of "polluter pays", both in terms of reimbursing those affected as well as paying for restoration.

Please see 5.1 Liability for Historical Environmental Incidents or Damage.

The PLI stipulates that a person who owns, or has control over handling, any hazardous substance, is liable for such amounts as set out in the schedule to the PLI in case of death or injury to any person (other than a person liable to be compensated under labour laws) or damage to any property has resulted from an accident while handling any hazardous substance. The PLI obliges such person to obtain insurance against such liability prior to handling any hazardous substance. Further, it is market practice to obtain insurance in respect of any damage, injury or harm to persons or property.

There are no specific laws concerning contaminated land in India; the same are governed in terms of the laws set out in 1.1 Key Environmental Protection Policies, Principles and Laws. However, the following two points should be noted.

The Ministry of Environment, Forest and Climate Change has issued a Guidance Document for Assessment and Remediation of Contaminated Sites in India. This document details methodologies for the process of selecting and implementing preferred remediation options. It is intended as a practical manual for agencies (both government and non-government) involved in the assessment, investigation and remediation of contaminated sites. "Contaminated sites" are defined as “delineated areas in which the constituents and characteristics of the toxic and hazardous substances, caused by humans, exist at levels and in conditions which pose existing or imminent threats to human health and/or the environment”.

The Central Pollution Control Board has, based on the above guidance, issued a Reference Document on Identification, Inspection and Assessment of Contaminated Sites.

While India has several policy and legislative measures in place to protect the environment (see 1.1 Key Environmental Protection Policies, Principles and Laws), there is no dedicated law for climate change. The following are noteworthy.

  • The government of India has issued the National Action Plan on Climate Change, 2008. This plan envisages deployment of appropriate technologies for adaptation and mitigation of GHG emissions, and engineering new and innovative forms of market, regulatory and voluntary mechanisms to promote sustainable development.
  • The Energy Conservation Act, 2001 is a central legislation which aims to reduce energy consumption in various sectors.
  • "Renewable purchase obligations" have been imposed pursuant to the Electricity Act, 2003, whereby obligated entities are required to procure a specified share of their electricity consumption from renewable sources.

Pursuant to signing the landmark Paris Agreement under the UNFCCC in 2015, the government of India has committed to:

  • reducing the emissions intensity of its GDP by 33–35% by 2030 from its 2005 level;
  • achieving about 40% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030; and
  • creating an additional carbon sink of 2.5–3 billion tonnes of CO₂ equivalent through additional forest and tree cover by 2030.

In furtherance to these goals, the government of India has set a target of installing 175 GW of renewable energy capacity by 2022, which includes 100 GW from solar, 60 GW from wind, 10 GW from biopower and 5 GW from small hydro power.

There are no specific laws concerning asbestos in India, and the same are governed in terms of the laws set out in the response to 1.1 Key Environmental Protection Policies, Principles and Laws. However, it is notable that asbestos-related activities are amongst those in respect of which "prior-environmental clearance" is required to be obtained.

As noted in 1.1 Key Environmental Protection Policies, Principles and Laws, various rules have been issued under the EPA in respect different types of waste, including plastic waste, construction waste, solid waste, bio-medical waste, e-waste and hazardous waste. These rules set out dispensations concerning the generation, treatment and disposal of such waste.

Subject to the strictures described in 14.3 Requirements to Design, Take Back, Recover, Recycle or Dispose of Goods, ordinarily – once the waste has been disposed of by a third party in accordance with the law – the producers/consignor of such waste will not be held liable.

The concept of "extended producer responsibility" exists in respect of certain types of waste (eg, plastic waste, e-waste, solid waste) whereby the producer’s responsibility for the good extends until its end-of-life (either directly, or by outsourcing the same to a third party).

Where any pollution is taking place or likely to take place due to accident or other unforeseen act or event, the person in charge of the place in which such pollution is occurring or likely to occur is required under the Water Act, the Air Act and the EPA to intimate the same to the pollution control board and other authorities or agencies as required.

SPCBs are required to maintain a register containing particulars of the conditions imposed on installations under the Air Act and the Water Act. Such register is open to inspection at all reasonable hours by any person interested in, or affected thereby.

The Companies Act, 2013 sets out the contents required to be included in a company’s annual report, including:

  • the state of the company's affairs, material changes and commitments, if any, affecting the financial position of the company;
  • the conservation of energy, including:
    1. the steps taken or impact on conservation of energy;
    2. the steps taken by the company for utilising alternate sources of energy; and
    3. the capital investment on energy conservation equipment).

Regulations issued by the Securities and Exchange Board of India require the top 1,000 listed companies (by market capitalisation) to include in their annual reports a description of the initiatives taken by them from an environmental perspective. Other listed companies are also encouraged to do so on a voluntary basis.

Purchasers and lenders ordinarily undertake a (legal and technical) environmental due diligence in M&A/property/financing transactions. Such a diligence extends to ascertaining if requisite environmental permits have been obtained, if the said permits are being complied with, and generally if applicable environmental laws have been adhered to. The object of the due diligence exercise is to ascertain potential liabilities arising in respect of the asset/property/activity. See also 5.2 Types of Liability and Key Defences for further details on seller indemnities.

Please see 5.2 Types of Liability and Key Defences.

The Clean Environment Cess (previously known as the "Clean Energy Cess") was levied as a kind of carbon tax as a duty of excise under Section 83 (3) of the Finance Act, 2010 on coal, lignite and peat – goods specified in the Tenth Schedule to the Finance Act, 2010 – with a view to financing and promoting clean environment initiatives, research in the area of clean environment or related purposes.

The Goods and Services Tax, introduced in 2017, has subsumed within itself three environment-related cesses: (i) the Swachh Bharat Cess; (ii) the Clean Energy Cess, levied on coal since 2010 and all taxable services since 2015; and (iii) the Water Cess, chargeable since 1977 on water consumption by industry and local authorities.

J. Sagar Associates

Vakils House
18 Sprott Road
Ballard Estate
Mumbai 400 001
India

+91 22 4341 8633

+91 22 4341 8600

bharath.shivappa@jsalaw.com www.jsalaw.com
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Trends and Developments


Authors



J. Sagar Associates is a leading national law firm in India. It comprises 320 professionals operating out of seven offices: Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai and New Delhi. For over 25 years the firm has provided legal representation, advice and services to leading international and domestic businesses, banks, financial services providers, funds, governmental and statutory authorities, and multilateral and bilateral institutions. It is recognised as the Indian law firm that has led – and continues to lead in India – a paradigm shift towards institutionalising and professionalising law firm ownership and management. This contemporary and modern approach is reflected in its work.

Environmental Protection and Climate Action in India

India is expected to be an engine of global economic growth in the decades to come, despite a slowdown in recent months resulting from the black-swan event that is the COVID-19 pandemic. Indeed, India has set its sights on becoming a USD5 trillion economy by the financial year 2024-25. In keeping with present trends, a concomitant of this growth will be rapid urbanisation, increased industrialisation, a growing population, and greater energy consumption. Coupled with the clear and present threat of climate change, these factors create an imperative that such development does not come at the cost of the environment. This article highlights trends and issues that define or are expected to characterise India’s sustainability efforts and challenges.

Enforcement remains key

The framework for environmental protection in India is as old the country’s constitution, which was promulgated in 1950 and places a responsibility on both the state and the citizens to protect and improve the environment. However, active legislation (and the supporting regulatory and institutional framework) for protecting the environment only came into being from the 1970s onward. The genesis of these legislative efforts was India’s participation in the Stockholm Conference of 1972, which called for taking appropriate steps to preserve the Earth’s natural resources.

In the decades since, a multitude of laws – both legislative and executive – have been introduced to combat, prevent and manage various types of pollution and pollutants. A bevy of federal and state-level agencies, with the backing (and, sometimes, the prompting) of the writ courts and, more recently, a dedicated environmental tribunal, have shepherded the implementation and enforcement of the law.

These efforts have been met with varying degrees of success. While there have been notable victories (the requirement for compensatory afforestation, the evolution of the principle of absolute liability in the context of hazardous/dangerous activities, and the levy of fines and restitutive obligations on polluters, to name a few), the efficacy of these laws has been undermined in a great part by the limitations of enforcement efforts. As a result, the courts have regularly had to step in – often in response to petitions filed by NGOs and other interested parties – and direct that requisite preventative, investigative, curative, or punitive actions be taken. This was aptly observed by the Supreme Court in Indian Council for Enviro-Legal Action v Union of India and Ors., (1996) 5 SCC 281, thus:

“Even though laws have been passed for the protection of environment, the enforcement of the same has been tardy, to say the least. With the governmental authorities not showing any concern with the enforcement of the said Acts, and with the development taking place for personal gains at the expense of environment and with disregard of the mandatory provisions of law [...] Even though it is not the function of the Court to see the day-to-day enforcement of the law, that being the function of the Executive, but because of the non-functioning of the enforcement agencies, the courts as of necessity have had to pass orders directing the enforcement agencies to implement the law.”

However, even in instances where the courts have intervened and passed appropriate directives, there has been limited impact in cases of widescale and pervasive infractions, given that enforcement is ultimately the domain of the executive.

Hence, while there are laws and agencies aplenty (with another "authority" having just been constituted by ordinance to address pollution in the capital city), the need of the day remains efficacious enforcement. Classic examples of this malaise include the abysmal condition of the Ganges and Yamuna rivers, despite decades of intervention efforts, and the issue of stubble-burning in the farm-belt, which continues to result in dangerous levels of air pollution in the nation’s capital, Delhi.

The push for renewables

One of the positives of India’s climate action efforts has been the growing footprint of renewables in the country. The installed capacity of renewable energy has steadily grown in the past decade, and currently stands at 89.2 GW. This figure is even more impressive when one considers that it constitutes nearly 24% of the total installed electric generation capacity in India, and the fact that approximately 85 GW has been developed by the private sector. Indeed, both in terms of absolute numbers as well as their share in total capacity, India is amongst the global leaders in renewables development.

In this regard, the push for renewables has been boosted by Indian commitments pursuant to the Paris Agreement in 2015 – namely, 40% of the total energy generation capacity will be from renewables by 2030. These commitments are significant in that, while India’s participation in global environmental protection efforts date back to the Stockholm Declaration of 1972 (and later, the Rio Declaration of 1992 and the United Nations Framework Convention on Climate Change in 1996), it had never before bound itself to measurable domestic actions to protect the environment and address climate change.

Encouragingly, authorities at the federal and state levels have put in place a series of policy and legislative measures to encourage deployment of renewables, including imposition of "renewable purchase obligations" (mandates for purchasing a certain portion of electricity consumed from renewables), preferential tariffs for renewable energy, encouragement of solar parks, grant of capital subsidies, waiver of statutory/regulatory fees, etc. These measures have had a positive impact, with India having been consistently ranked amongst the top global destinations for renewables investments in recent years.

Nevertheless, the industry has faced pressures and challenges on account of non-compliance with the renewable purchase obligations, delays in obtainment of evacuation approvals/infrastructure (which lead to "idling" of capacity), difficulties in obtaining land and right of way for projects (as well as the attendant issue of converting the permitted usage of such land), resistance from certain stakeholders to easing the deployment of solar rooftop installations, and, latterly, the low tariffs discovered in auctions, which have made the industry sensitive or susceptible to market changes (eg, the imposition of duties on imports, restrictions on supply from certain countries, etc).

Despite these concerns, the future for renewable energy in India remains bright, with the Indian government having set an ambitious target of achieving 175 GW of renewable capacity by the year 2022 – this includes 100 GW from solar, 60 GW from wind, 10 GW from biopower and 5 GW from small hydro power.

Transforming mobility

Electric or hybrid vehicles (e-vehicles) will play a major role in India’s strategy to reduce emissions pursuant to its commitments under the Paris Agreement. It is estimated that savings of 846 MT of net CO₂ emissions and oil savings of 474 MTOE are achievable by sales penetration of 30% for private cars, 70% for commercial cars, 40% for buses, and 80% for two or three-wheelers by 2030. As part of this strategy, the central and federal governments have announced a slew of subsidies and other fiscal and monetary incentives geared towards promoting e-vehicles. In parallel, in a bid to reassure investors, various regulatory pronouncements have sought to clarify and explicate the legal framework for the sector.

However, the industry is still in its nascency, with issues of "range anxiety" (lack of charging infrastructure and the time taken for complete charging), high costs (both upfront and lifetime) and local peculiarities (appropriate battery technologies with long-lasting throughput that can function efficiently in India’s high temperature) having to be overcome before this new form of mobility can begin comprehensively replacing internal combustion-based transport. However, the opportunities that the nascent e-mobility eco-system offers in India far outweighs the challenges that exist.

Ushering in a carbon market

The Indian government is mulling over a domestic emissions trading scheme for the country, similar to or inspired by the dispensation in the EU and in other jurisdictions where such schemes have been in vogue. Such a move will mark a shift from hitherto "command and control" dispensation towards market-based and market-driven solutions to the threat of climate change. It waits to be seen what industries/sectors will be covered under such an indigenous scheme so as to ensure maximum efficacy, and whether emissions allowances will be allocated in a manner that maximises their value.

Recasting environmental laws

In another development sure to have far-reaching implications in the industry, there have been calls to streamline and consolidate the laws on the environment into a singular code or set of codes. Similar exercises have been undertaken in the recent past with respect to labour laws and bankruptcy laws, and were intended to “amalgamate, simplify and rationalise the relevant provisions [to] facilitate the implementation and remove the multiplicity of definitions and authorities, without compromising on the basic concepts”.

These calls stem from criticisms that the vast and diverse array of various environmental statutes (and the rules and notifications issued thereunder) and policies has created multiple and overlapping compliances/approvals/authorities. Concerns have been raised by the industry that environmental laws are extremely diffuse and complicated, and have resultantly created constraints in the ease of doing business. However, these exercises in the past, particularly for the labour sector, have raised concerns and fears that protections were being watered down. It thus waits to be seen if the proposed exercise to rationalise and codify environmental laws will ensure paramountcy of environmental protection over business expediency.

Looking ahead

Energy storage (in the form of batteries) is going to be vital to achieving India’s sustainability and climate goals, given its role in India’s mobility story, serving the following purposes:

  • effectively integrating renewable energy (being intermittent in nature) with the grid; setting up microgrids with diversified loads or standalone systems;
  • addressing peak demand deficits (presently combatted using costly power); and
  • providing other ancillary market services (such as grid support, etc).

However, business models and the regulatory framework for deployment of energy storage solutions are still evolving, given the rapid technological developments underway in the sector (including the emergence of cost-effective energy storage technologies), and the new and emergent applications of this technology.

Additionally, a paradigm shift in the energy sector is expected to be imminent in the coming years on account of the "hydrogen economy". Burning hydrogen gas is free of carbon emissions – it produces clean by-products in the form of heat and water – thus, hydrogen can be used as fuel in power plants, or in fuel cells to power vehicles or buildings. The declining cost of producing the gas offers the potential for it to replace conventional fuels such as oil and natural gas. Indeed, the Hydrogen Economy Outlook estimates that deployment of clean hydrogen in the near future offers a cost-effective means of cutting up to 34% of global greenhouse gas emissions.

India, along with the rest of the world, is working toward building a post-COVID-19 economic revival, having suffered the human and economic toll of this unprecedented tragedy. However, the need to pick up the pieces and rebuild also presents a golden opportunity to chart the course of economic revival in a manner that is responsive to the dire and pressing demands for climate action, both present and future.

J. Sagar Associates

Vakils House
18 Sprott Road
Ballard Estate
Mumbai 400 001
India

+91 22 4341 8633

+91 22 4341 8600

bharath.shivappa@jsalaw.com www.jsalaw.com
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Law and Practice

Authors



J. Sagar Associates is a leading national law firm in India. It comprises 320 professionals operating out of seven offices: Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai and New Delhi. For over 25 years the firm has provided legal representation, advice and services to leading international and domestic businesses, banks, financial services providers, funds, governmental and statutory authorities, and multilateral and bilateral institutions. It is recognised as the Indian law firm that has led – and continues to lead in India – a paradigm shift towards institutionalising and professionalising law firm ownership and management. This contemporary and modern approach is reflected in its work.

Trends and Development

Authors



J. Sagar Associates is a leading national law firm in India. It comprises 320 professionals operating out of seven offices: Ahmedabad, Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai and New Delhi. For over 25 years the firm has provided legal representation, advice and services to leading international and domestic businesses, banks, financial services providers, funds, governmental and statutory authorities, and multilateral and bilateral institutions. It is recognised as the Indian law firm that has led – and continues to lead in India – a paradigm shift towards institutionalising and professionalising law firm ownership and management. This contemporary and modern approach is reflected in its work.

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