A bill seeking to mandate the use of non-fossil energy sources such as biomass, ethanol and green hydrogen was passed by Parliament on Monday.

The Energy Conservation (Amendment) Bill, 2022 was cleared in Rajya Sabha by a voice vote on Monday. Lok Sabha passed the legislation in the previous session in August this year.

The bill provides for penalties for violations by industrial units or vessels, and on manufacturers if a vehicle fails to comply with fuel consumption norms.

The amendments also seek to promote renewable energy and the development of a domestic carbon market to battle climate change.

The bill is also aimed at helping the country achieve its international commitments on climate change.

It aims to introduce new concepts such as carbon trading and mandate the use of non-fossil sources to ensure faster decarbonisation of the Indian economy and help achieve sustainable development goals in line with the Paris Agreement.

Replying to a debate on the bill, Minister of New and Renewable Energy R K Singh said the bill is environment friendly and will allow carbon trading in the country.

"For government, the environment is precious and will take all steps for that," he said, adding India has now become a leader in the energy transition.

Currently 24 per cent of the energy consumption is from the housing sector and the government has targeted only the big commercial establishments having a load capacity of 100KW, he said.

However, he added the state government has been given the liberty to reduce the building load up to 50KW.

"We are also expanding the concept of green building. We are making it more sustainable. Earlier, it has energy efficiency and we are also adding the concept of renewable energy in this," he said.

The country also aims to be a leader in green hydrogen and the ministry has already drafted rules and the industry is going to invest to set up capacity for 25 million tonnes of green hydrogen capacity.

He also said the country would achieve over 50 per cent of its power generation capacity from non-fossil fuels by 2030.