Budget 2023: Industry players expect announcements on carbon market, green hydrogen

A World Bank report last year said that out-of-pocket healthcare payments had pushed more than half a billion people into extreme poverty.

As Budget 2023 nears, industry players expect announcements by Finance Minister Nirmala Sitharaman on the national carbon market, green hydrogen production, and energy storage technology.

It is time to set up a robust national carbon credit market, said Manish Dabkara, Chairman and Managing Director of EKI Energy, who expects an accelerated move towards its development to support a low-carbon future.

“Another important aspect that needs attention in this year's budget is a ‘carbon market stabilization fund’ to encourage industries to take up investments towards low emission technologies and processes,” Dabkara told Moneycontrol.

Energy experts also believe the upcoming budget may contain some announcements on the setting up of a carbon market in the country.

Hetal Gandhi, Director of Research at CRISIL Market Intelligence and Analytics, said an announcement on a carbon market is especially important for the industrial sector, which would have to save on carbon emission-led spending and align with Environmental, Social and Governance (ESG) commitments.

Green hydrogen

And with the recent approval of the National Green Hydrogen Mission, hopes are also high for announcements in the segment.

The Union Cabinet had approved the Mission on January 4 with an initial outlay of Rs 19,744 crore for promoting the production and utilisation of green hydrogen.

"The recent announcement of the National Green Hydrogen Mission is a big shot in the renewable energy arm…. Having said that, we believe a good chunk of the initial outlay should be earmarked towards recent developments to help India localise supply chains as far as electrolyser manufacturing is concerned,” said Bikesh Ogra, MD & CEO of renewable energy company Jakson Green

Allocations in clean energy are expected to take the front seat in Budget 2023. Dabkara expects the Budget to focus on green energy enablers like green hydrogen with an emphasis on indigenous energy storage technology, promotion of decentralised energy systems and Indian carbon market as an enabler to channelize green finance.

Renewable energy

As the Indian government plans to install 500 gigawatt (GW) of renewable energy capacity by 2030, the energy industry expects announcements that would boost solar manufacturing capacity.

“When we are talking about developing close to 100GW of solar manufacturing capacity by 2030, we need a much more conducive environment. Domestic content requirement needs to essentially be made compulsory for subsidised as well as non-subsidised projects,” said Deepak Jain, President of Grew Energy Pvt. Ltd.

“This will immediately shoot up our growth trajectory. In the Union Budget 2023, the Government can think about centralising solar installation policies which will boost installed renewable energy capacity in order to achieve the goal of 500GW installed capacity by 2030,” Jain added.

To source power from 500 GW of non-fossil base by 2030, support to areas such as hydropower, a more flexible fuel policy compared to other renewables, and promoting energy storage such as pumped hydro storage and battery energy solutions would be required, said Gandhi.​