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Budget 2023: The key areas that will accelerate India's green energy transition

The Budget 2023 is expected to announce measures that will accelerate India's march towards its net zero emissions target. Incentives for rapid adoption of EVs and green hydrogen as a clean fuel are big focus areas.

January 23, 2023 / 09:10 AM IST
India's push for green hydrogen and EVs likely to be major focus areas in Budget 2023.

India's push for green hydrogen and EVs likely to be major focus areas in Budget 2023.

As India takes rapid strides towards achieving its climate goals, the upcoming Budget 2023 is expected to present a bouquet of measures that will put sustainability at the forefront of development.

India is already on the path of achieving its net-zero emission targets by 2070 with a slew of measures like focusing on clean mobility by rapidly adopting EVs and the big bang announcement towards Green Hydrogen Mission.

The approval to the issuance of sovereign green bonds is a step towards that direction. It will help India raise critical climate finance that will be used for greening infrastructure projects and make sustainability a keyword for future course of development.

In the Union Budget for FY23, finance minister Nirmala Sitharaman announced that the government will issue green bonds.

‘As a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for mobilising resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.’

Also read: What is the Indian government’s green bonds programme?

India Inc is not behind in its march towards achieving green targets. Companies are looking forward to investing in technologies that will help in accelerating sustainability goals. Access to finance and investing in Research and development are two key pillars that will drive this change.

The Union Budget for 2023-24 can make announcements to energise the transition towards renewable energy adoption in a big way. The government has already announced the PLI scheme that has proved to be a success in attracting manufacturers to ramp up production in India. PLI in advanced chemistry cell battery storage and solar PV modules will drive the push towards green energy transition.

A PLI for manufacturing of electrolysers will accelerate India’s journey towards most competitive source of green hydrogen. The Union Budget for 2023-24 can expand it to other critical areas to turn India into a green energy hub for not just domestic adoption but exports as well.

A national carbon market is also something that India Inc expects in the upcoming Budget.
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.

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first published: Jan 23, 2023 09:10 am