Hydrogen Mission, Solar Energy, Clean Air: A Green Budget

Along with many areas, the Budget 2021 focused on clean energy sources as the Finance Minister allocated funds for various programmes for a cleaner future.

Focus on green

Finance Minister (FM) Nirmala Sitharaman in her budget speech laid emphasis on the green power sources as she launched Hydrogen Energy Mission in 2021–22 which will focus on generating hydrogen from green power sources, which would result in reducing the country’s carbon footprint.

The use of hydrogen as an energy source is seen as an important shift that would lead to zero emissions. As per a report by The Energy and Resources Institute (TERI), demand for hydrogen could increase by at least 5-fold by 2050. The report expects industries like fertilizers, refineries, steel and road transport, shipping, and aviation sectors to be the demand drivers of Hydrogen in the coming years.

Being called the fuel of the future, hydrogen will play some role in the transport sector in heavy-duty and long-distance segments. Therefore, this mission may play an important role in order to achieve zero carbon emissions from certain industries.

Solar push

To give a further boost to the non-conventional energy sector, the FM proposed to provide additional capital infusion of ₹1,000 crore to Solar Energy Corporation of India (SECI) and ₹1,500 crore to Indian Renewable Energy Development Agency (IREDA).

The customs duty on solar inverters and lanterns were also increased to put emphasis on the solar energy sector. ‘To build up domestic capacity, we will notify a phased manufacturing plan for solar cells and solar panels. At present, to encourage domestic production, we are raising duty on solar inverters from 5% to 20%, and on solar lanterns from 5% to 15%’, she said.

As per a recent study by GOGLA and C-kinetics, the Indian market for solar lanterns and solar home systems is expected to reach a size of up to $327 million by 2023 as the demand will drive market growth.

Clean air

Keeping the need for green recovery in mind, the Finance Minister allocated ₹2,217 crore for 42 urban cities with a million-plus population with the aim to tackle the air pollution problem. The funds are meant to be used for air quality improvement measures in the cities including capacity building of the local urban bodies as well as state pollution control boards to improve monitoring of air pollution levels.

All in all, the dedicated allocation for such green measures have been appreciated by many, however, it will be important to see and assess the impact of these programmes on long-term ambitions.

Head to moneyguru’s Insight section to stay updated on all major financial news updates of the day