Here is my quick take on budget announcements related to ESG.
- Swappable batteries: The government proposes to bring a battery swapping policy. This will enable people in in urban areas who may not have charging facilities to utilise their electric vehicles. While this is late in coming, it is a welcome move.
- Sovereign green bonds: In order to reduce the carbon intensity of the country the finance minister has proposed the issuance of sovereign green bonds as a part of the government’s borrowing programme. This will bring in much needed funding into the country for its public sector. Private capital will now have to increase their funding as well to meet the net zero challenge.
- An amount of Rs. 2,217 crores for 42 urban centres with a million-plus population has been set aside for tackling air pollution. The action on these allocation will need to be seen.
- It is proposed to launch a Hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sources. This is really the need of the hour.
- To give a further boost to the non-conventional energy sector, it is propose to provide additional capital infusion of Rs 1,000 crores to Solar Energy Corporation of India and Rs 1,500 crores to Indian Renewable Energy Development Agency. These are welcome.
- The action plans for ten sectors such as electronic waste, end-of-life vehicles, used oil waste, and toxic & hazardous industrial waste are ready. This will be supported by active public policies covering regulations, extended producers’ responsibilities framework and innovation facilitation. Again, these are really needed to move forward on circular economy.
- Creation of Energy Service Company (ESCO) business model to facilitate capacity building and awareness for energy audits, performance contracts, and common measurement & verification protocol. This will be useful in urban centres.
- Promoting agroforestry and private forestry. This will help in increasing our green cover.
- Rs 19,500 cr allocation for PLI manufacture of solar PV modules. This will promote PV modules production in India and should promote solar expansion.
- An increase in the customs duties on wind and solar infrastructure import and the reverse bidding process requires companies to provide projects at lowest cost which is quite contradictory.
- Promotion of greener public transport through special mobility zones with zero fossil fuel policy. This will give a fillip to sustainable transporatation.
- Thermal Power Plants are mandated to use 5-7% biomass pallets. Supports reduced GHG emissions.
To my mind, one of the misses of the budget has been the setting up of carbon budgets and carbon markets. These are the need of the hour.