CG High Court Becomes First to Grant Protection Under New RCO Rules: What It Means for Industry

But why did the court step in? And what does this mean for businesses, power producers, and India’s clean-energy goals? Let’s break it down in simple language without the legal fog.

Understanding the New RCO Framework

The Renewable Consumption Obligation is part of India’s effort to push real, measurable use of green energy. Unlike the older Renewable Purchase Obligation (RPO)—which focused mainly on buying renewable power—the RCO looks at actual consumption of renewable energy by designated consumers as stated in this blog.

Under this system:

• Large industries, distribution companies, and captive power users must meet yearly renewable consumption targets.

• Compliance can come from self-generation, renewable energy certificates, or grid procurement.

• Non-compliance invites financial penalties under the Energy Conservation Act.

On paper, this looks like a smart upgrade. In practice, it has shaken many sectors that built their energy strategy around the earlier RPO model.

The September 2025 Notification That Started It All

In September 2025, the Ministry of Power released a revised notification strengthening the RCO regime. The new rules changed how industries could count renewable energy for compliance. The most controversial part was the exclusion of waste-heat based co-generation from eligible renewable sources.

For years, many manufacturing units used co-generation to meet their renewable obligations. Overnight, that route closed. Companies that had invested crores based on earlier policies suddenly faced penalties for doing what the government once encouraged.

That contradiction became the heart of the legal challenge.

What the Chhattisgarh High Court Actually Said

On 1 December 2025, the Chhattisgarh High Court stepped in and granted interim protection to the petitioning industries. In simple terms, the court ordered that:

• No coercive penalties should be imposed until the matter is fully heard.

• Authorities must avoid harsh action based on rules that are still under legal scrutiny.

• Businesses deserve clarity before punishment.

This does not cancel the RCO rules. It simply ensures that enforcement waits until legal questions are answered. For companies staring at heavy fines, this was a massive relief.

Why Industries Felt Cornered

Imagine running a factory where you invested in a co-generation plant because government policy recognized it as renewable. Then a new notification arrives and says, “Sorry, that no longer counts.”

Suddenly:

• Compliance reports turn non-compliant.

• Financial planning goes off track.

• Future investments look risky.

Businesses argued that such abrupt changes violate basic fairness. The court seemed to agree that transition needs breathing space, not bulldozers.

Read more here: https://lawbhoomi.com/cg-high-court-becomes-the-first-to-grant-protection-under-the-new-rco-notification/