Introduction
In this edition of our Energy, Infrastructure and Natural Resources Newsletter, CMS INDUSLAW's Megha Arora, Abhishek Rohatgi, Jayati Bhatia, and Gayathri Menon bring you key legal, regulatory, and judicial developments from July 2025. This edition covers important updates, including the revision of guidelines for setting up Hydrogen Valley Innovation Cluster and Green Hydrogen Hubs in India under National Green Hydrogen Mission, amendments to the implementation mechanism under the ALMM Order for solar PV cells, and the clarifications regarding the applicability of the ALMM Order for solar power plants connected to BESS. We also discuss key judicial pronouncements relevant to the sector.
Ministry of Finance (MoF)
The MoF has notified that the bonds issued by the Indian Renewable Energy Development Agency (IREDA), redeemable after 5 years, will qualify as a 'long-term specified asset' under Section 54EC of the Income-tax Act, 1961 (IT Act), vide notification dated July 09, 2025. Under Section 54EC of the IT Act, capital gains arising from the transfer of long-term capital assets can be exempt from being charged under Section 45 of the IT Act – which provides for capital gains tax, provided that the capital gains are reinvested into specified bonds within a period of 6 months. With this notification, IREDA bonds redeemable after 5 years — if issued on or after July 09, 2025—will now be eligible instruments for such reinvestment.
To qualify for the exemption under Section 54EC of the IT Act, the bonds must be held for a minimum of 5 years, during which they cannot be transferred or encashed. The maximum capital gain that can be invested in such bonds to avail exemption is capped at INR 50 lakhs per financial year.
Additionally, proceeds raised by IREDA through these bonds must be deployed exclusively in renewable energy projects capable of servicing their own debt without depending on state government.
Ministry of New and Renewable Energy (MNRE)
The MNRE notified the revised scheme guidelines for establishing hydrogen valley innovation cluster (HVIC) and green hydrogen hubs (GH2 Hubs) under the national green hydrogen mission (NGHM) (Revised Scheme Guidelines), on June 27, 2025. The Revised Scheme Guidelines supersede the earlier scheme guidelines for setting up hydrogen hubs under the NGHM, issued by the MNRE on March 15, 2024.
HVICs will be strategically established across various regions in India to showcase the diverse applications of Green Hydrogen (GH2). These clusters will foster business innovation, develop new business models, and create linkages between hydrogen producers and end-users. HVICs are expected to build localized hydrogen value chains, create demand commitments from end-users for GH2, and ensure long-term sustainability beyond the period of NGHM funding.
Under the Revised Scheme Guidelines, the (GH2 Hubs) will be developed as geographically concentrated zones where hydrogen production, end use (domestic or export), and associated infrastructure such as storage, processing, and transport will be co-located. GH2 Hubs may be located inland or near ports and must have a minimum planned capacity of 1,00,000 Metric Tonnes Per Annum.
The Department of Science and Technology will nominate the implementing agency for HVICs, while MNRE and its nominated implementation agency will be responsible for GH2 Hubs.
Amendment to the implementation mechanism under the ALMM Order for solar PV cells
The MNRE issued amendment (ALMM Amendment) to its earlier office memorandum dated December 09, 2024 (Earlier OM), on July 28, 2025. The Earlier OM had implemented the Approved Models and Manufacturers of Solar Photovoltaic Modules (Requirements for Compulsory Registration) Order, 2019 (ALMM Order), in relation to solar PV cells.
The ALMM Order mandates that all projects falling within its purview must use solar PV modules from List-I of the ALMM Order, and those modules must use solar PV cells listed in List-II of the ALMM Order. The Earlier OM detailed the implementation of List-II of ALMM Order for solar PV cells.
Under the Earlier OM, projects falling within the purview of the ALMM Order were exempt from the requirement to use solar PV cells from List-II of the ALMM Order if the last date for bid submission was on or before December 09, 2024. This fixed date, by virtue of the ALMM Amendment, has now been replaced by a newly introduced "cut-off date," defined as the date falling exactly 1 month after the publication of List-II of the ALMM Order for solar PV cells.
Similarly, under the Earlier OM, the requirement to include provisions in bid documents mandating the use of solar cells from List-II of the ALMM Order, applied to projects with bid submission dates after December 09, 2024. After the ALMM Amendment, this obligation is now triggered if the bid submission date falls after the defined cut-off date.
The amendment further clarifies that no relaxation shall apply to domestic content requirement obligations under other MNRE schemes such as PM-KUSUM, PM Surya Ghar, and CPSU Scheme Phase-II.
Clarification on applicability of the ALMM Order for Energy Storage Systems
The MNRE issued clarifications regarding the applicability of the ALMM Order for solar power plants connected to battery energy storage systems (BESS), on July 28, 2025.
The MNRE has clarified that if a solar plant is used to charge a BESS which, directly or indirectly, supplies power to the grid, such a solar plant will not qualify as a "behind-the-meter" project solely for captive consumption. Therefore, it will not be exempt from requirements of the ALMM Order for solar PV modules. It was further clarified that the "behind-the-meter" exemption only applies to those solar plants which are used solely for captive use by a consumer or group of consumers, without any grid interaction.
The MNRE has also clarified that for solar PV cells, the applicability of the ALMM Order to a solar plant exclusively charging a BESS will follow the status of that BESS i.e., - if the BESS is exempt from the ALMM Order for solar PV cells (as per MNRE's office memorandum dated December 09, 2024), then the solar plant charging it will also be exempt. Conversely, if the BESS is subject to the ALMM Order, the associated solar plant must also comply with it.
Ministry of Environment, Forest and Climate Change (MoEF&CC)
The MoEF&CC notified the Environment Protection (Management of Contaminated Sites) Rules, 2025 (Management of Contaminated Site Rules) under the Environment (Protection) Act, 1986, on July 24, 2025.
The Management of Contaminated Site Rules establish a regulatory framework for the management and remediation of sites contaminated by hazardous substances. Sites contaminated solely due to radioactive waste, mining operations, oil spills, or solid waste from dump sites are excluded from the scope of these Rules. However, where a contaminant is mixed with any of these excluded sources and the contamination exceeds the response level limits specified under the Rules, remediation obligations under the Rules will still apply.
Local bodies and district administrations are tasked with identifying suspected contaminated sites based on complaints, waste management records, studies, or the industrial history of the site. Once identified, the relevant State Pollution Control Board must determine the responsible person and direct them to prepare a remediation plan and carry out remediation through a selected organisation at their own cost. The remediation plan is required to set out the proposed remediation level, risk assessment methodology, remediation techniques, funding sources, safety measures, and post-remediation monitoring procedures. Where no responsible person is identified, the State Pollution Control Board may undertake the remediation itself or with governmental support.
The Management of Contaminated Site Rules further empower the State or Central Pollution Control Boards to impose environmental compensation on any responsible person who fails to undertake or comply with remediation requirements. Such compensation is in addition to the cost of remediation and is to be credited to the Environmental Relief Fund established under the Public Liability Insurance Act, 1991. The fund is to be utilised for assessing and remediating contaminated sites and for implementing the provisions of the Rules.
Amendment to the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016
The MoEF&CC notified the Hazardous and Other Wastes (Management and Transboundary Movement) Amendment Rules, 2025 (Hazardous Waste Amendment), on July 01, 2025, which will come into effect from April 01, 2026.
The Hazardous Waste Amendment introduces a new Chapter VIII to the principal regulations, establishing an extended producer responsibility framework for scrap of non-ferrous metals. It sets out the registration requirements and responsibilities of manufacturers, producers, collection agents, refurbishers, and recyclers of non-ferrous metals. Additionally, it prescribes the roles and obligations of the Central Pollution Control Board, State Pollution Control Boards, municipalities, local bodies, and other relevant government agencies in relation to non-ferrous metals.
The Hazardous Waste Amendment further provides that any manufacturer, producer, collection agent, refurbisher, or recycler who fails to comply with the rules and thereby causes loss, damage, or injury to the environment or public health will be liable to pay environmental compensation, as per guidelines issued by the Central Pollution Control Board.
Ministry of Heavy Industries
The Ministry of Heavy Industries issued a notification under the PM Electric Drive Revolution in Innovative Vehicle Enhancement (PM E-DRIVE) Scheme, on July 28, 2025, providing incentives to electric trucks (e-trucks).
The notification aims to accelerate electric vehicle adoption in the commercial freight segment by offering demand incentives for e-trucks falling under categories N2 and N3, as defined under the Central Motor Vehicle Rules: (i) N2—vehicles with a gross vehicle weight (GVW) exceeding 3.5 tonnes but not exceeding 12 tonnes; and (ii) N3—vehicles with a GVW exceeding 12 tonnes up to 55 tonnes. In the case of articulated vehicles i.e., tractor-trailer combinations, the incentive will be applicable only to the N3-category 'puller tractor'.
The incentives under the PM E-DRIVE Scheme are linked to battery capacity or capped at 10% of the ex-factory price, subject to maximum limits based on the e-truck's GVW. To promote fleet modernization, incentives will be granted only upon submission of a valid scrapping certificate for an internal combustion engine (ICE) truck of equal or higher GVW. Claims will be verified via the PM E-DRIVE and Vahan portals.
Several conditionalities must be met to avail the incentive, including minimum warranty requirements for the battery, motor, and vehicle. The scheme also mandates performance and efficiency thresholds by vehicle category. A Phased Manufacturing Programme (PMP) has been introduced to promote domestic manufacturing and technology localization.
Ministry of Mines
Introduction of Offshore Areas Atomic Minerals Operating Right Rules, 2025 under the OAMDR Act, 2002
The Ministry of Mines notified the Offshore Areas Atomic Minerals Operating Right Rules, 2025 (Atomic Mineral Rules) under the Offshore Areas Mineral (Development and Regulation) Act, 2002, on July 14, 2025.
The Atomic Mineral Rules establish a dedicated framework for reconnaissance, exploration, and production of offshore atomic minerals where the grade meets or exceeds the prescribed threshold. Operations below this threshold fall under the Offshore Areas Operating Right Rules, 2024.
Under the Atomic Mineral Rules authorised central agencies may undertake reconnaissance and exploration without an operating right, provided prior intimation and compliance with Schedule A of the Atomic Mineral Rules. Upon confirmation that the threshold grade is met, operating rights—either a composite licence or production lease—may be granted exclusively to government entities.
Composite licences require Department of Atomic Energy approved exploration plans, submission of 0.25% performance security, and are valid for 3 years, extendable by 2 more years. Production leases, tied to resource viability, require 0.5% security and remain valid until reserves are exhausted.
Applications, approvals, and execution of deeds are bound by timelines. Discovery of atomic minerals under general offshore rights mandates reporting and area surrender, with reimbursement eligibility.
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