The announcements made in the ‘Energy Transition and Climate Action’ section of the Budget were a manifestation of the commitments made by the Indian Government during the COP-26 summit earlier year. All these initiatives are welcome moves towards achieving carbon neutrality and will promote actions and investments across the sustainability value chain and create enough opportunities for job creation.
Proper implementation of these action plans and policies will open doors for the localization of many green technologies and create a new green technology market in India. There will also be a massive opportunity to create regional hubs to export high-value green products and EPC services. Setting out an ambitious target through ‘Panchamrit’, well supported through budget announcements and deployment of ‘Green Bond’ proceeds on public sector projects, are all welcome and right moves in this direction. This will catalyse India’s transition to climate-action leadership.
Focus on solarÂ
The additional allocation of Rs 19,500 crore for Production Linked Incentive will benefit the entire value chain of the solar PV manufacturing industry. This will attract domestic and foreign investment in raw material, cell, and module manufacturing areas. It will also empower the entire domestic manufacturing ecosystem, which will reduce the panels’ prices, boost domestic manufacturers’ sales, improve India’s global competitiveness in solar manufacturing, and make us self-reliant.
Mandate for usage of biomass pellets
If properly implemented, the mandate of 5-7% usage of Biomass Pellets in thermal plants fuel mix will reduce GHG emissions and help solve the chronic pollution-related issue due to stubble burning at the beginning of every winter season. This will boost the domestic biomass downstream industry, resulting in higher income for the farmers, developing many small and micro biomass processing companies, and boosting our rural economy.
Sovereign green bonds and circular economy action plans
The issuing of Sovereign Green Bonds for mobilizing resources for green infrastructure is a step towards achieving carbon neutrality by 2030. India ranked 120th in the global sustainability index in 2021. Although awareness among the corporates is high, implementation is significantly low. This is due to multiple issues such as higher cost of technology, poor ROI, successful projects/references, etc. The public sector can lead such projects, which will become examples/models for the private sectors to follow and implement. This will also bring down the cost of the sustainability technologies and enable wider adoption.
Circular economy action plans will attract investment in sustainable technologies and have multiplier effects such as energy efficiency, minimization of wastages, and employment generation across the sustainability value chain. This is a big step towards achieving carbon neutrality by 2070.
Top 5 expected growth drivers for 2022-23:
1. Investment in domestic solar raw material, cell and module manufacturing
2. Investment in sustainable technologies such as Green Hydrogen and Fuel Cells
3. Investment in Biomass downstream sector will boost the rural economy
4. Battery Swapping model can be implemented in the lower end of the market
5. An uptake in energy-efficient audits, contracts, and projects