The 2008 Indian National Action Plan on Climate Change is a policy framework to achieve national growth objectives along with climate change mitigation and adaptation targets and in terms of energy efficiency, it comprises the National Mission for Enhanced Energy Efficiency (NMEEE). One component of the NMEEE is the Perform Achieve and Trade Scheme (PAT), which is a results-based mechanism designed to enhance the cost-effectiveness of improvements in energy efficiency in energy-intensive industries and large facilities through tradable certificates of energy savings. The ultimate goal of the PAT is to contribute to the national targets of a 20-25% reduction in carbon intensity with regards to 2005 levels by 2020.
The energy savings target is individualized for obligated actors (calculated as a percentage reduction in their annual Specific Energy Consumption –SEC-) and is applicable to almost 500 facilities, known as Designated Consumers (DCs). The DCs have 60% of India’s GHG emissions and are located in energy-intensive industries within 8 sectors of the Indian economy.
In order for DCs to meet their targets, these entities must submit a report on energy consumption to the scheme’s authority appointed by the state and to the Bureau of Energy Efficiency (BEE), establish an energy manager responsible for submitting annual energy consumption returns to the Designated Agencies and BEE and either purchasing certificates (known as ESCerts within this scheme1) to make up for any gap in meeting their compliance obligations or selling the ESCerts surplus on the market.
1 Equivalent to 1 million tonne of oil equivalent (Mtoe) of energy savings.