Transitioning to a green future: Budget 2024 underlines energy security

With energy security being one of the nine priorities of the NDA government in their Budget planning, Finance Minister Nirmala Sitharaman on Tuesday announced a series of policies related to green energy, new clean technologies and climate action.

"We will bring out a policy document on appropriate energy transition pathways that balance the imperatives of employment, growth and environmental sustainability," Sitharaman said in her Budget speech.

The government will also formulate a road map for moving the “hard to abate” industries from “energy efficiency” targets to “emission targets”. Appropriate regulations for transition of these industries from the current “Perform, Achieve and Trade” mode to “Indian Carbon Market” mode will be put in place, Sitharaman said. The Centre had last year formulated India’s first domestic carbon trading market, the final shape of which is still in the works.

India will also develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. Several public sector banks, and non-banking financial corporations (NBFCs) have pitched to the finance ministry to have a clear definition on climate and green financing to streamline global funding in these emerging areas.

The Ministry of New and Renewable Energy (MNRE) has received its highest-ever budgetary allocation of Rs 19,100 crore, almost double the allocation in 2023-24, with an eye on recently announced PM Surya Ghar Muft Bijli Yojana for rooftop solar projects.

MNRE Minister Pralhad Joshi said the high allocation depicts the focus of the government on green growth. “The focus area is definitely Surya Ghar. Apart from that, PM KUSUM, National Green Hydrogen Mission, Green Energy Corridors, and bio-energy will get further push through the fund allocation,” Joshi said.

In her speech, the FM said the Surya Ghar scheme has seen 1.28 crore registrations and 14 lakh applications. MNRE officials said that around 2.2 lakh solar rooftop systems have already been installed.