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| | A monthly newsletter from Shakti Sustainable Energy Foundation delivering news, research and unbiased analysis covering the key pillars of the exponential energy transition—the energy industry, energy policy, clean energy, climate change and climate justice ------------------------------------------- | |
| | India 2022-23 Budget Highlights | |
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| | | | | India had, at COP26, declared to the world its strong commitments to attain net zero status by 2070. The target is opined to be ambitious by most, as the third largest carbon dioxide emitter globally has a steep path to traverse in order to materialise this strong projected ambition. India’s pledge is entwined with its aspirations of a robust 2030 GDP, projected to be between $8.5 trillion | |
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| | | and $10 trillion. The foundation for this target was laid in the robust and thematic address of this year’s Union Budget, presented by the Finance Minister, Ms. Nirmala Sitharaman, as a part of the 25-year lead-up to India's 100-year independence. Unlike the previous Union Budgets presented in the last three years that have been only acknowledging the risks posed by climate change to India’s macroeconomic stability, the current Budget took up the issues of sustainability and climate change seriously. The Union Budget 2022-23 underpinned climate action among the four priority areas of the government along with the PMs Gati Shakti program of inclusive development and energy transition. By including clean energy and electric mobility in the list of sunrise sectors, the Budget has tried to send an important signal to investors, financial institutions and the workforce alike. The announcements pave the way for the reduction of carbon intensity in the economy and our strong commitment towards net zero. The terms “Environment”, “Energy Transition” and “Climate Action” were mentioned by the honourable Finance minister in the context of the business and education sector, giving a clear signal that the government was committed to fulfilling its commitments both to the Paris agreement and COP26. | |
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| | | | How Union Budget 2022-23 Deals With Climate Change Policy In India | |
| | | | | The government has shown its intent to outpace fossil fuel-based power generation by increasing the outlays and introducing provisions to strengthen the demand and supply side of the clean energy transition. The proposal to co-fire 5-7% biomass pellets in thermal power plants, will result in carbon dioxide reduction, besides providing a source of income to farmers and aiding in the reduction of stubble burning. The allocation for Central schemes of the Ministry of New and Renewable Energy was increased by 16.8% compared to the Budget Estimates of last year, and the intra- and extra-budgetary resources support of the ministry’s primary arm Indian Renewable Energy Development Agency was increased threefold. The Budget also gave a concerted push to facilitate domestic manufacturing of 280 GW of installed solar capacity by 2030 by allocating an additional Rs 19,500 crores to the production linked incentive with a priority to fully integrate manufacturing units to Solar Photovoltaic modules. However, the uptake of the scheme by the investor community remains a question. The revised estimates of spending on the Faster Adoption and Manufacturing of Electric Vehicle, 2015, scheme was increased by Rs 800 crore to Rs 2,908 crore. The battery swapping policy with interoperability standards announced in the Budget will further promote the thriving ecosystem for the electric and hybrid vehicles market. On the energy efficiency front, the development of an Energy Service Company (ESCO) business model in large commercial buildings, capacity creation and awareness for energy audits, performance contracts, and a standard framework for measurement and verification process will be facilitated. This is expected to contribute to energy efficiency and saving measures, especially in commercial buildings. The budget has also prioritised clean air in the environment sector, with goals across ministries and sectors, including the National Clean Air Program under the Ministry of Environment, Forest and Climate Change, as well as the ministries of Power, New and Renewable Energy, and Urban Affairs. To tackle air pollution, Rs. 2,217 crore have been earmarked for 42 urban centres with a million-plus population. As an indicator of the country’s seriousness towards climate action, sovereign green bonds have been announced under the government’s overall market borrowings in 2022-23. The bonds will be used to raise funds for environmentally friendly or climate-friendly infrastructure. The proceeds from the bonds will be used to fund public-sector projects that will reduce the economy's carbon intensity. The budget makes little reference to green hydrogen, but the newly announced green hydrogen policy puts in place a good foundation for developing a competitive green hydrogen sector. The Union Budget 2022 might be touching a few right cords by incorporating the climate action and clean energy transition narrative, the key, however are the details. The allocation of Rs 19,500 crore for Production Linked Incentive (PLI) for manufacture of high-efficiency solar modules might seem like a welcome proposition. However, the recently announced increase in the goods and services tax (GST) for critical components of solar projects from 5% to 12%, seems to dampen the prospects of a solar-based future. However, the budget’s professed climate gains may be squandered away due to the ecologically damaging proposals like river linking and highway expansion. The failure to allocate sufficient funding for biodiversity conservation and pollution abatement is a missed opportunity in the wake of COVID-19 recovery. | | | | |
| | Union Budget Provisions at a Glance | |
| | | Image Credit: Shakti Sustainable Energy Foundation | | | | |
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| | | | News and Developments from Shakti | |
| | | Bengaluru and Surat get targeted clean air solutions | | | |
| | Shakti-supported efforts are contributing to the development of clean air action plans for Bengaluru and Surat. Both cities have been identified as non-attainment cities under the National Clean Air Programme and require robust planning and collaborative actions in air quality management. As a result of our efforts, both cities now have comprehensive source apportionment studies that show location specific and sectoral emissions as well as the detailed counter-actions to mitigate and control these emissions. | | | | |
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| | Bengaluru: Shakti supported the Center for Study of Science, Technology and Policy (CSTEP) to develop the first ever source apportionment and emission inventory for the city of Bengaluru. For PM2.5, emissions from the transport sector emerged as the primary contributor (with a 40% share in PM2.5 pollution), followed by soil dust (25%). For PM10 pollution, soil dust emerged as the top contributor with a 51% share, followed by transport at 19%. Both studies were recently released by the Honourable Chief Minister of Karnataka, Shri Basavaraj Bommai at a high-profile stakeholder event in Bengaluru organised by the Karnataka State Pollution Control Board. | |
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| | | Surat: The Surat Municipal Corporation (SMC) and the Gujarat Pollution Control Board, in collaboration with World Resources Institute India and The Energy and Resources Institute, and supported by Bloomberg Philanthropies and Shakti have collaborated to develop the source apportionment study and the Surat clean air action plan. The findings of the source apportionment study show that major sources contributing to PM10 and PM2.5 concentrations during the winter season are industry including power plants and brick kiln (37% in PM10 and 40% in PM2.5), dust (15% in PM10 and 7% in PM2.5), biomass usage in residences (14% in PM10 and 15% in PM2.5) and transport (13% in PM10 and 16% in PM2.5). The Surat plan and the | |
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| | | | | | source apportionment study were launched in Surat by Honourable Member of Parliament Mr. C R Patil in the presence of Municipal Commissioner SMC, Mr. Banchhanidhi Pani, Mayor Smt. Hemali Kalpeshkumar Boghawala and other Central and State Ministers. | |
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| | | Subnational Governments Coming to the Forefront of Climate Action | |
| | | | | Mobilizing all levels of government has long been recognised as a vital tool in climate action. This is because every aspect of policy, be it roads or building dams or airports, needs to pass the climate test. Shakti supported Vasudha Foundation to develop district climate change action plans for six districts—Nagpur, Pune, Indore, Bhopal, Rajkot and Ahmedabad. Each plan, contextualised to its respective district, takes a holistic view of the current policies and recommends steps that need to be taken in the short, medium and long-term to bring about the necessary changes that are in compliance with India’s overall climate commitments. The Nagpur plan was presented to the Honourable Environment Minister of Maharashtra, Shri. Aaditya Thackeray, and the Pune plan was launched by the Pune Municipal Corporation. More recently, the plans for Bhopal and Indore were launched at the SKMCCC-EPCO office, Bhopal (State Knowledge Management Centre on Climate Change-Environmental Planning and Coordination). The district plans for Rajkot and Ahmedabad were released by the Honourable Chief Minister of Gujarat, Shri Bhupendra Rajnikant Patel. | | | | |
| | Collaboration with PCRA on Clean Freight | |
| | | | | India’s freight system relies heavily on road transport: 59% of freight moves on roads. But this comes with huge challenges that include a large footprint on India’s climate and environment due to the dependence on oil. Much of road freight transport is inefficient and polluting, which impacts the economic competitiveness and profitably of the freight sector. As part of its clean freight program, Shakti is collaborating with the Petroleum Conservation Research Association to create the most viable and cost-effective energy-efficient freight solutions for India. Among other goals, this collaboration will foster the exchange of knowledge and best practices and advance policy solutions to reduce emissions from the sector. | | | | |
| | Greening India's Financial System | |
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| | Green finance is a key building block of the transition to net zero emissions. India needs an estimated USD 2500 billion from 2015-2030 in order to achieve its NDCs, but as of 2018 achieved only 13% of this target has been met. The need to mobilize finance exponentially in order to support the transition is urgent and demands attention. |
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| | | | The Green Indian Financial Systems Initiative was conceived to drive action in this regard. The initiative is a multi-stakeholder exchange on greening India’s financial system between France, Europe and India partners. Convened by Agence Française de Développement (AFD), SIDBI and Shakti, the initiative fosters dialogue on green finance in India Financial, catalyses green finance initiatives and identifies priority areas for action. The initiative kickstarted with a virtual conference on Friday, 28th January 2022, which saw experts weigh in on how to build a more resilient financial system for a green Indian economy. | |
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| | | ________________________________________________________________ | |
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| | | We welcome your feedback and comments on this newsletter. Please write to us at communications@shaktifoundation.in Disclaimer: EnergyMatters is owned and published by Shakti Sustainable Energy Foundation. No person, organization or party can copy or re-produce the complete contents on this site and/or magazine or any part of this publication without a written consent from the editors’ panel and the author of the content, as applicable | |
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