The budget has allocated Rs 35,000 crore for capital expenditures related to the energy transition and targets 5 MT of Green Hydrogen production by 2030
Including Green Growth as one of the Saptarishis, one of the 7 priorities in the Amrit Kaal Budget, FM Nirmala Sitharaman clearly underlined the government’s emphasis on the country’s net-zero targets.
Presenting the budget, the FM announced support for setting up of battery energy storage of 4,000 MwH. She added that green credit programme will be also notified under the Environment Protection Act. She also said that the Budget provides for Rs 35,000 crore for priority capital investment towards energy transition and net zero objectives.
Commenting on the allocation towards green growth, Saurabh Kamdar, Associate Partner, ESG, KPMG in India, said, "Union Budget in a winning strike pegs green growth and allocates over 70,000 crores for specific initiatives: Rs.19,700 crores for Green Hydrogen, Rs. 35000 crores for energy transition, Rs. 20,700 crores for renewable energy evacuation. The government's commitment towards climate agenda is evident and notable - a sure point which makes the policy making of an emerging nation standout. This apart proving an enabling mechanism for green credit ensures right amount of push for fast tracking sustainable finance."
With a vision to make India an energy-independent nation and to de-carbonise critical sectors, the government approved the National Green Hydrogen Mission on January 4, 2023, with an initial outlay of Rs 19,700 crore. "India is moving forward to net-zero carbon emissions by 2070. An outlay of Rs 19,700 crore for the Green Hydrogen Mission will facilitate transmission to low carbon intensity and also reduce dependence on fossil fuels," she said in her Budget speech.
"Green Growth as one of the seven themes in Budget 2023 is extremely relevant for driving decarbonisation of Indian economy. While India’s renewables strategy is already ambitious, the 35,000 Crore ‘priority capital’ proposed for energy transition will accelerate the pathways to the 2030 target of 500 GW of RE that will ensure that at least half of India’s energy comes from non-fossil source," expressed Dipankar Ghosh, Partner & Leader, Sustainability & ESG, BDO in India.
The mission will facilitate demand creation, production, utilisation and export of green hydrogen, and mobilisation of over Rs 8 lakh crore of investments by 2030. The minister said, “The Government is targeting 5 MT of Green Hydrogen production by 2030.”
Satish Kumar, President & Executive Director, Alliance for an Energy Efficient Economy (AEEE), said, "The FY24 Budget appears to usher a phase of 'green transition', guiding the economy toward a sustainable development pathway. By focusing on implementing various initiatives to increase energy efficiency and lower carbon intensity, it demonstrates a commitment to foster green growth in the nation. The proposed budget places a strong emphasis on the creation of large-scale green job opportunities to prepare young people for mitigating the effects of climate change."
FM also announced that the government will provide viability gap funding for 4,000 MWh battery energy storage systems. "To steer the economy on sustainable development path, battery energy storage systems with a capacity of 4,000 MWh will be supported with viability gap funding," she said. She also informed the House that a detailed framework for pumped storage projects will be formulated. About the renewable energy evacuation, she said that the inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of Rs 20,700 crore, including the central government support of Rs 8,300 crore.
Ramanuj Kumar, Partner, Cyril Amarchand Mangaldas, opines, “As expected, the Union Budget has increased allocations for infrastructure investment and energy transition with special emphasis on logistics and transportation. This will create greater opportunity for private sector investment and help achieve India's NDC commitment under the Paris Agreement."