Budget 2023: Charting The Future Road Map For A Green India

The first budget of the ‘Amrit Kaal', presented by Finance Minister Nirmala Sitharaman, has reaffirmed the commitment of India in its fight against climate change. The seven pillars of Amrit Kaal or the ‘Saptarshi' has laid the fine print for 'India@100', which has touched every strata of society.

Taking a leaf out of Prime Minister Narendra Modi's clarion call for “LiFE”, or Lifestyle for Environment, the budget has prioritised ‘Green Growth', as part of ‘Saptarshi', paving the way for a greener and cleaner India. The budget has clearly defined the roadmap for India's journey towards net zero by 2070 and has provided a major boost towards achieving the target of 50% power generation through renewables.

The allocation of Rs 35,000 crore towards energy transition and net zero objectives in the budget is a clear indication of how India intends to take the lead to combat climate change. The move also emphasises the significance of decarbonisation and net zero, the biggest threat to our planet.

The climate threat is global and knows no boundaries, and mankind is looking for realistic and implementable solutions to address the issue of limiting future temperature rise to within 1.5 to 2 degrees celsius from pre-industrial levels. The Finance Minister has done her best by taking pragmatic steps, including duty rationalisation and adequate funding, that underline India's determination to achieve energy transition and attain the goal of reaching net zero emission by 2070.

The transition towards a green power ecosystem in India has taken a giant leap in the recent past with the sector registering a CAGR of approximately 16% in the past five years. India's renewable power capacity currently stands at around 1,21,000 MW, with solar accounting for 64,000 MW and wind accounting for the rest. There is an additional 47,000 MW that comes from hydropower projects. Yet, the baseload power generation in India, which is critical to industrial growth and a normally functioning economy, lies with fossil fuel-based power.

The intermittent nature of renewable energy and the yet-to-mature storage segment still do not guarantee stable and round-the-clock baseload power supply from renewable sources. Further, given the high cost of energy storage, fossil fuel (both coal and natural gas) based power generation, which accounts for a third of the CO2 emissions, is expected to play an important role in the baseload power mix for the next few decades.

One of the major factors vital to India's fight against climate change is carbon capture and its utilisation and storage, or CCUS, particularly in hard to abate sectors like power, steel, cement, fertilisers and petrochemicals.

CCUS is a scalable and viable solution for reducing the carbon footprint from fossil fuel-based power generation and the growing industrial sector. For CCUS to make a meaningful decarbonisation impact on India's sustainable economic growth and future CO2 emissions, CCUS needs to grow to 750 Mtpa by 2050 from near zero today.

Building a thriving CCUS ecosystem in India can be achieved through policy-based incentives and financing for adopting CCUS and with government support that focuses on the indigenisation of commercially established carbon capture technologies and R&D in relatively nascent CO2 utilisation technologies. A common CO2 transportation infrastructure can also be created so that CO2 hubs and clusters and markets can evolve.

The Government of India has already recognised the role of CCUS in the future roadmap towards realising the vision of halving CO2 emissions by 2050 and achieving net zero by 2070. Recently, the apex policy think tank of the nation, the NITI Aayog, came out with a detailed study on the policy and implementation framework required for CCUS in India. Policy-enabled adoption of CCUS is critical to long-term sustainability and continued competitiveness of critical sectors such as coal-based power generation, steel, cement, oil and gas, fertilisers and chemicals, as well as the sunrise sectors of gasification and blue hydrogen.

I certainly expect a lot more policy action on CCUS in the coming months, as carbon capture can perfectly complement renewables in India's energy transition towards a greener and cleaner future.

Atanu Mukherjee is the chief executive officer at Dastur Energy Inc., a company that works with the energy, materials, and commodity industry globally in areas related to strategy, technology, engineering, economics, and finance.

The views expressed here are those of the author, and do not necessarily represent the views of BQ Prime or its editorial team.