Budget: Govt bets on clean energy with Rs 35,000-crore impetus

The earmarked funds will be invested by the ministry of petroleum and natural gas and will help Asia's third-largest economy in its "priority capital investments" planned towards "net zero objectives" and "energy security", said Finance Minister Nirmala Sitharaman, who delivered her fifth consecutive budget on Wednesday.

"India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition," Sitharaman said in her speech.

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Under the 'Green Growth' priority, the government announced a slew of projects and programmes ranging from green hydrogen to energy storage projects and including green credit incentives for individuals and corporates.

Experts gave a thumbs up to the comprehensive 'green growth' package.

"Specific budgets provided by FM on Green Hydrogen, Energy Transition, Battery Storage Pumped Hydro, RE Evacuation from Ladakh and inclusion of Green Credit in Environment Protection Act, etc will go a long way in decarbonising the Indian economy,” said Debasish Mishra, Partner and Energy, Resources and Industrials Industry Leader, Deloitte India.

The finance minister set a target of producing 5 million metric tonnes (MMT) of green hydrogen annually by 2030, in a bid to reduce its carbon emissions and dependence on fossil fuel imports.

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This comes at a time when the country's commercial vehicle sector is betting big on hydrogen-based fuel technology to cut the world's third-largest auto industry's vehicular emissions.

Green hydrogen is dubbed as a vital cog in cutting down emissions in the long-haul transport segment. However, the technology's nascency in the country is likely to require more support from the government for it to be commercially viable.

Industry watchers stressed on the need for more such policy-level intervention if the country were to realise its net-zero goals.

"The policy interventions in specific fuels like green hydrogen and wind must continue for India to succeed in achieving its long-term decarbonization objectives," said GE South Asia president Mahesh Palashikar.

Sitharaman also said that Battery Energy Storage Systems with 4,000 megawatt-hour capacity will be supported by way of viability gap funding. Additionally, she announced an investment of Rs 20,700 crore to construct an inter-state transmission system for evacuation and grid integration of 13 gigawatts of renewable energy from Ladakh.

The government will also announce a Green Credit Programme under the Environment (Protection) Act to incentivise sustainable initiatives taken up by companies, individuals, local bodies and companies.

"This can help in gradual energy transformation and lead to upgradation and green retrofitting of existing buildings," said a note co-authored by CREDAI, a realty developers' association, and Colliers, a real estate investment company.

The government reiterated its focus on transitioning towards cleaner energy by setting aside Rs 35,000 crore in Budget 2023 on Wednesday, as India aims to achieve its net-zero goals by 2070.