top of page
Search

Regulatory Update: Energy, Infrastructure, Mining & Environment Regulatory

Welcome to the first edition of BTG Advaya’s regulatory update on energy, infrastructure, mining and environment. As India advances its sustainability and resource management goals, we present key regulatory developments from October 2025 across the Ministries of Coal, Jal Shakti, Mines, New and Renewable Energy, Power, and Environment.  


These updates reflect significant policy shifts and compliance obligations for stakeholders. 

Historic Launch of Commercial Mining in Arunachal Pradesh

 

On 6 October 2025, the Ministry of Coal launched India’s first commercial coal mine at the Namchik–Namphuk block in Arunachal Pradesh, reviving a project that had remained inactive since 2003 under the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act). 


With geological reserves of approximately 1.5 crore tonnes (~15 million tonnes), the mine—leased to Coal Peak Pvt. Ltd.— was reopened under a transparent auction process. It is expected to generate ₹100 crore (~USD 11 million) in annual revenue for the state and catalyse local employment. 


Worker welfare and environmental compliance form a key part of this initiative: 


  • Accident cover of ₹1 crore (~USD 113,000) and air-accident cover of ₹2 crore (~USD 226,000); 

  • Insurance and ex-gratia of ₹25 lakh (~USD 28,000) for contract workers; 

  • Reclamation of 57,000 hectares already completed and another 16,000 hectares targeted by 2030 under Mission Green Coal Regions. 

These measures align with MMDR-mandated sustainability obligations. The project also highlights the government’s EAST principles—Employment, Anti-corruption, Sustainability, Transparency—under which the Northeast has attracted over ₹6 lakh crore (~USD 68 billion) in investments over the past decade. 

 

Digital Governance for Rural Water Supply 


The Department of Drinking Water and Sanitation, under the Ministry of Jal Shakti, on 10 October showcased an upgraded Rural Piped Water Supply Schemes (RPWSS) module under the Jal Jeevan Mission. The GIS-based system, integrated with PM Gati Shakti, assigns digital IDs to every asset—from source to household tap—enabling real-time monitoring, predictive maintenance, and traceability. 


States and Union Territories are required to complete ID creation by November 2025. This upgrade effectively establishes India’s first digital public infrastructure for utilities, empowering Panchayats with operational visibility and audit-ready data for scheme implementation. 

 

Critical Mineral Recycling Incentive Scheme (CMRIS) 


On 2 October 2025, the Ministry of Mines issued detailed guidelines for the Critical Mineral Recycling Incentive Scheme, a key component of India’s National Critical Mineral Mission. The scheme aims to reduce import dependence and promote a circular economy by recovering lithium, cobalt, and other strategic minerals from domestic waste streams. 


  • Outlay: ₹1,485 crore (~USD 168 million), revised from the initial ₹1,500 crore (~USD 170 million); 

  • Tenure: FY 2025-26 – 2030-31; 

  • Sectoral allocation: Lithium-ion recycling ₹700 crore, e-waste ₹650 crore, other streams ₹135 crore; 

  • Targets: 270 ktpa recycling capacity and 40 kt annual mineral recovery; 

  • Legal anchors: compliance with the Environment (Protection) Act, 1986 and alignment with India’s Lifestyle for Environment (LiFE) initiative. 


The scheme covers 27 critical minerals and combines capex and opex incentives tied to performance milestones—creating opportunities for startups, MSMEs, and large manufacturers in the recycling space. 

 

Mineral (Auction) Second Amendment Rules, 2025 


The Ministry of Mines notified amendments to the Mineral (Auction) Rules 2015 on 17 October 2025 to streamline operationalisation of auctioned blocks under the MMDR Act. 


Key changes include: 


  • Defined milestones: three-year limit from Letter of Intent to Mining Lease; seven years for Composite Licences; 

  • Structured monitoring: creation of a Project Management Unit (PMU) and periodic stakeholder meetings; 

  • Retrospective application to pending cases, ensuring consistency for legacy bidders. 


By prioritising milestone-based progress over penalty-based compliance, the amendment is expected to accelerate block development—particularly in deep-sea and critical-mineral segments. 

 

Draft Electricity (Amendment) Bill, 2025 


Released on 9 October 2025, the draft bill represents the first major revision of the Electricity Act 2003 in nearly two decades. Comments are due within 30 days (by 8 November 2025). 


Highlights of the proposed framework: 


  • Distribution reforms: cost-reflective tariffs; suo motu tariff powers for regulators; mandatory franchisee registration; shared use of networks among licensees. 

  • Efficiency & governance: 120-day cap for regulatory proceedings; removal of NOC requirements in defence zones; creation of a National Electricity Council for Centre-State coordination. 

  • Renewables & markets: alignment of state mandates with central minimum standards; penalties of ₹0.35–0.45 per kWh (~USD 0.004–0.005) for shortfalls; expansion of Section 66 to regulate power derivatives and virtual PPAs. 

  • Digital oversight: CEA to frame regulations for cybersecurity, smart grids, and data governance; APTEL’s strength increased from five to seven members. 

The amendments seek to restore financial discipline among distribution companies and enable a technology-ready, competitive power market. 

 

Revised Renewable Consumption Obligation (RCO) 


On 27 September 2025, the Ministry of Power issued a new framework under the Energy Conservation Act 2001, replacing the Renewable Purchase Obligation for designated consumers (distribution licensees, open-access users, and captive plants). 


  • Trajectory: rises from 29.91% in FY 2024-25 to 43.33% by FY 2029-30; 

  • Break-up for FY 2029-30: 3.48% wind, 1.33% hydro, 4.5% distributed renewables, 34.02% other RE; 

  • Special rule: hill and Northeast states receive 50% relaxation on DRE obligations. 


Compliance options include direct renewable usage, purchase of RECs, or payment of a buy-out price determined by the CERC. The Bureau of Energy Efficiency (BEE) will monitor compliance through certified energy accounts and annual filings, with penalties under Section 26(3) for defaults. For designated consumers, the RCO replaces state-level RPO requirements entirely. 


 

CERC Proposal on Buy-out Price 


Following the RCO notification, the CERC on 22 October 2025 proposed fixing the buy-out price at 105% of the year’s weighted-average REC price. 


  • Indicative rate for FY 2024-25: ₹245/MWh (~USD 2.77/MWh); 

  • Comments due: 21 November 2025; 

  • Revenue allocation: 75% of collections to be transferred from the Central Energy Conservation Fund to State Funds for renewable and storage projects. 


The Commission clarified that direct renewable consumption and REC purchases remain the preferred compliance routes; the buy-out is intended only as a last-resort option. 

 

Strengthening Environmental Standards – Article 6 Implementation 


The Ministry of Environment, Forest and Climate Change has constituted a National Designated Authority (NDA) under Section 3 of the Environment (Protection) Act 1986 to implement Article 6 of the Paris Agreement. 


The NDA will: 


  • Evaluate and authorise emission-reduction projects in line with India’s Nationally Determined Contributions (NDCs); 

  • Maintain a registry through the Indian Carbon Market administrator; 

  • Facilitate transition of pre-2020 Clean Development Mechanism (CDM) credits; 

  • Develop guidance on Article 6.8 Non-Market Approaches and fee structures. 


This institutional reform provides the legal backbone for India’s participation in international carbon markets while ensuring environmental integrity in domestic projects. 

 

Amendment to the Electricity Rules 2005 – Energy Storage Systems 


The Electricity (Amendment) Rules 2025, notified on 19 September 2025, formally recognise Energy Storage Systems (ESS) as independent as well as integrated components of the power value chain. 


  • ESS may be developed, owned, leased, or operated by generating companies, transmission/distribution licensees, consumers, or independent providers. 

  • When co-located, ESS inherits the host’s legal status; when stand-alone, it remains a separate scheduling entity but may commercially sell, lease, or rent capacity to multiple counterparties. 


By granting ESS full regulatory standing, the amendment promotes investment flexibility and enhances renewable-energy integration into the national grid. 

 

Closing Note 


October’s regulatory updates share a clear direction: codified, transparent governance built on digital systems and sustainability metrics. Mining is becoming accountable, water and power infrastructure data-driven, and environmental oversight globally integrated. 

Together, these measures signal India’s intent to reconcile energy security with environmental integrity through clear, enforceable law. 


For further guidance or tailored compliance assistance, please contact the BTG Advaya Energy & Environment team at practicemanager@btgadvaya.com. 


Disclaimer: This newsletter is for informational purposes only and does not constitute legal advice. 

 

bottom of page