Budget: Energy transition gets fund boost, green growth key economic driver

Making green growth the key component of Amrit Kaal is the Bharatiya Janata Party-ruled central government’s vision for the coming 25 years.

Union Finance Minister Nirmala Sitharaman on February 1 announced a slew of policies for the green economy. In line with the country’s Net Zero 2070 target and allied climate goals, the Union Budget gave a push to a green industrial and economic transition.

A record high budgetary grant went to energy transition, which would be a key driver in reducing carbon emission and leap towards green fuels and green energy sources.

“This Budget provides Rs 35,000 crore for priority capital investments towards energy transition and net-zero objectives, and energy security by the Ministry of Petroleum & Natural Gas (MoPNG),” said Sitharaman in her Budget speech.

The Centre has entrusted the oil ministry, which naturally has the highest fossil-fuel footprint, to steer the energy transition of the country.

According to the expenditure budget of MoPNG, Rs 30,000 crore has been allocated to oil-marketing companies (OMCs) and the balance for strategic oil reserves. It is expected the capital outlay to the OMCs would be focused on new-age fuels — green hydrogen, ethanol, and other biofuels.

The OMCs are currently in the process of drafting a comprehensive plan on ramping up green hydrogen production. Under the newly announced Rs 19,000-crore Green Hydrogen Mission, mandatorily procuring green hydrogen has been stipulated for various sectors, including refineries.

The OMCs have also begun to produce ethanol from bio residue and agri waste. The plan is in sync with the Centre’s long-term target of higher levels of ethanol blending with petroleum. E20, or petroleum blended with 20 per cent ethanol, will be retailed from April 1.

Battery-energy storage systems up to 4,000 megawatt-hour capacity and pumped storage projects will be supported with viability gap funding for furthering investors’ interest.

Central support with Rs 8,300 crore was announced for the Rs 20,700-crore interstate transmission system, being built for evacuation and grid integration of 13 gigawatt of renewable energy from Ladakh.

The minister also announced a Green Credit Programme under the Environment (Protection) Act.