PAT — Perform Achieve Trade Scheme (India)

Definition

PAT (“Perform Achieve Trade”) is India’s first market-based mechanism for energy efficiency in energy-intensive industries. It was notified by the Bureau of Energy Efficiency (BEE) under the Ministry of Power in 2012 under the legal authority of the Energy Conservation Act 2001 (Section 14).

PAT operates by:

1. Identifying Designated Consumers (DCs) — large energy-intensive facilities in notified sectors that cross a specified threshold of annual energy consumption (typically expressed in Metric Tonnes of Oil Equivalent — MTOE)
2. Setting a Specific Energy Consumption (SEC) reduction target for each DC per 3-year compliance cycle
3. Issuing Energy Saving Certificates (ESCerts) to DCs that over-achieve their SEC target
4. Requiring DCs that under-achieve to purchase + surrender ESCerts equal to the shortfall, or pay penalty under Section 26 of the EC Act

The scheme has run 8 compliance cycles since 2012; under the Energy Conservation (Amendment) Act 2022, PAT is being progressively absorbed into the broader CCTS (Carbon Credit Trading Scheme) framework.

Sectors covered

PAT applies to DCs in 13 notified energy-intensive sectors:

• Thermal power plants
• Iron + steel
• Cement
• Aluminium
• Fertiliser
• Pulp + paper
• Textiles
• Chlor-alkali
• Petrochemicals + petroleum refineries
• Railways
• Distribution companies (electricity)
• Hotels (commercial buildings)
• Commercial buildings (other than hotels)

A facility is notified as a DC when its annual energy consumption exceeds the sector-specific MTOE threshold (e.g., 30,000 MTOE / year for thermal power; 30,000 MTOE / year for iron + steel; 20,000 MTOE / year for cement; lower thresholds for chemicals + paper). DC notification is published by BEE; once notified, the DC is bound to PAT compliance until de-notified.

How PAT cycles work

Each PAT cycle is 3 years. The DC is assigned a baseline SEC (typically the average of the 3 years preceding the cycle), and a target SEC for the end-cycle year that represents the BEE-mandated efficiency improvement.

Over-achievement: DC’s actual end-cycle SEC is better than the target. Excess saving is converted into ESCerts at a notified rate (typically 1 ESCert = 1 MTOE of saving). ESCerts are issued by BEE + tradable on power exchanges.

Under-achievement: DC’s actual end-cycle SEC is worse than the target. Shortfall is converted into ESCerts required to be purchased + surrendered. Alternative: pay penalty under Section 26 of the EC Act.

The trading platform: IEX + PXIL power exchanges, under CERC oversight, with BEE as scheme administrator.

PAT cycle history (illustrative)

Cycle	Period	DC count (approx)	Sectoral coverage
PAT-I	2012-15	~478 DCs	8 sectors
PAT-II	2016-19	~621 DCs	11 sectors
PAT-III	2017-20	~116 DCs added	11 sectors
PAT-IV	2018-21	~109 DCs added	11 sectors
PAT-V to VII	2019-23 + overlapping	Continuing	11-13 sectors
PAT-VIII	2023-26	Continuing	13 sectors

(Cycles overlap because DCs are notified rolling, not all at once. Cycle counts + dates are illustrative; verify with BEE for current status.)

PAT → CCTS transition

The Energy Conservation (Amendment) Act 2022 authorised the creation of a broader carbon market, operationalised through the Carbon Credit Trading Scheme (CCTS) 2023. CCTS encompasses both:

1. Energy efficiency (PAT’s existing scope) — now reframed as emission-intensity targets in CCTS terminology
2. GHG mitigation more broadly — including renewable energy + project-based offsets that PAT didn’t cover

Under the transition:

• Existing PAT DCs progressively migrate to CCTS compliance with mapping rules
• ESCert → CCC conversion ratios are notified by BEE per cycle (typically 1 MTOE saving ≈ 4 tCO₂e at India’s average grid emission factor; specific conversion notified per sector)
• PAT cycles already underway complete under PAT rules; new compliance cycles transition to CCTS framework

The transition is not instantaneous — PAT-VIII (2023-26) still operates under PAT rules; subsequent cycles for those DCs will be under CCTS.

BRSR + PAT linkage

For PAT-obligated DCs, the BRSR Section C Principle 6 (Environment) disclosure typically includes:

• The PAT cycle currently applicable
• Baseline + target SEC
• Actual SEC achieved (under the Energy Footprint Core attribute)
• ESCert generation / purchase activity for the cycle

The Energy Footprint Core attribute (energy consumption in GJ + intensity per ₹ of revenue) overlaps with but is not identical to the PAT SEC metric — PAT uses sector-specific physical units (MTOE per tonne of output, MTOE per MWh generated) while BRSR uses GJ per PPP-adjusted rupee. Both must be tracked separately.

Common PAT questions

Is PAT mandatory? Yes, for entities notified as Designated Consumers by BEE. DC notification is binding under Section 14 of the EC Act 2001. The penalty for non-compliance with PAT targets is set under Section 26.

Can SMEs participate in PAT? Not directly — PAT applies only to entities crossing the MTOE notification threshold in the 13 notified sectors. SMEs typically don’t qualify. The CCTS Offset Mechanism is the route for SMEs to generate carbon credits voluntarily.

Are ESCerts the same as Carbon Credit Certificates (CCCs)? No — ESCerts are energy-saving certificates (1 ESCert = 1 MTOE of energy saving). CCCs are emission-reduction certificates (1 CCC = 1 tCO₂e of GHG reduction). The two units measure different things; the conversion ratio is notified by BEE per sector + cycle.

What if a DC over-achieves AND chooses not to sell ESCerts? ESCerts are tradable on power exchanges; the DC can hold them across cycles (subject to validity rules). Many DCs strategically bank ESCerts as a cushion for under-achievement in future cycles.

Will PAT continue indefinitely? No — PAT is being absorbed into CCTS per the EC Amendment Act 2022. Existing PAT cycles complete; future compliance migrates to CCTS framework.

What is the relationship between PAT + RECs (Renewable Energy Certificates)? Separate regimes. PAT measures energy-efficiency improvement; RECs measure renewable energy generation / consumption. A DC can have both PAT compliance + REC retirement strategies running in parallel, often as part of a single decarbonisation roadmap.

For the broader Indian carbon market context, see CCTS. For the BRSR Energy Footprint Core attribute methodology, see Energy Footprint Disclosure.