India Budget 2021: Hydrogen mission; solar energy, clean air among focus areas

The Centre will launch a Hydrogen Energy Mission in 2021-22 for generating hydrogen from green power sources. Finance minister Nirmala Sitharaman's announcement of a hydrogen mission could go a long way in reducing India's carbon footprint, experts said.

According to a report titled "The Potential Role of Hydrogen in India – Harnessing the Hype" by The Energy and Resources Institute (TERI) released in December last year, demand for hydrogen could increase by at least 5-fold by 2050, continuing to grow in the second half of the century in India.

Demand for hydrogen is at around 6 metric tonne (MT) per annum, mainly from industry sectors, such as fertilizers and refineries. This can increase to around 28 MT by 2050 mainly due to cost reductions in key technologies and a push to reduce carbon footprint. Demand will mainly grow in steel and road transport, shipping and aviation sectors. The report also projected that India would require 40 MT of green hydrogen to achieve net zero carbon emissions by 2060. "I am glad this is happening now," said TERI director general Ajay Mathur.

Hydrogen from renewables can be produced through various methods, one of them is to use renewable electricity to split water into hydrogen and oxygen in an electrolyser, according to the International Renewable Energy Agency.

Hydrogen from renewable sources can play a critical role in heavy-duty, long-distance transport. While battery operated electric vehicles (BEV) will become competitive for heavy-duty transport, hydrogen production will be needed. It will also play a critical role in production of ammonia which is currently being produced from fossil-fuel based hydrogen.

"The Hydrogen Energy Mission will be critical because hydrogen may be the only way to have zero carbon emissions from heavy industries like cement and steel -- provided that hydrogen is produced by electrolysis from renewable electricity," said Ulka Kelkar, director, Climate Program, World Resources Institute, India.

The Budget also gave a boost to solar energy by proposing to provide a capital infusion of ₹1,000 crore to the Solar Energy Corporation of India and ₹1,500 crore to the Indian Renewable Energy Development Agency. "To build up domestic capacity, we will notify a phased manufacturing plan for solar cells and solar panels. At present, to encourage domestic production, we are raising duty on solar inverters from 5% to 20%, and on solar lanterns from 5% to 15%," Sitharaman said in her Budget speech.

Centre's clean air programme also got a shot in the arm with Sitharaman announcing a fund of ₹2,217 crore for air pollution control in 42 cities with a million plus population.

The Centre had approved the release of ₹2,200 crore last year based on recommendation of the 15th Finance Commission. The grant is meant to be utilised for air quality improvement measures under the National Clean Air Programme including capacity building of the local urban bodies as well as state pollution control boards to improve monitoring of air pollution levels in these cities. Delhi, however, is not among cities to receive funds under this grant.

Further, under the Swachch Bharat Mission, Sitharaman has announced a focus on complete faecal sludge management and waste water treatment, segregation at source of garbage, reduction in single-use plastic, reduction in air pollution by effectively managing waste from construction-and-demolition activities and bioremediation of all legacy dump sites. This will be implemented with a total financial allocation of ₹141,678 crore over a period of five years from 2021-2026.

Sitharaman also announced a voluntary vehicle scrapping policy to phase out old and unfit vehicles. "This will help in encouraging fuel-efficient, environment friendly vehicles, thereby reducing vehicular pollution and oil import bill. Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles. Details of the scheme will be separately shared by the ministry," she said.

"We still haven't seen the scrappage policy so we don't know what the fine print is. The scrappage policy is meant to be a stimulus to the economy and will also result in transition to cleaner vehicles but it's a voluntary policy so we will have to study the incentives and disincentives that come with it. There is continued focus on clean air in million plus cities and the government has now detailed out its waste management policy with waste management at source, management of landfills etc. A co-benefit of these will also be improved air quality, But we need to see how money for clean air was spent since last year. We actually need a performance budget to understand how the money is being utilised and what results its yielding," said Anumita Roy Chowdhury, executive director, Centre for Science and Environment.

The Budget announced an outlay of more than ₹4,000 crore over five years for a Deep Ocean Mission which will cover deep ocean survey exploration and projects for the conservation of deep sea biodiversity.

"Drawing from the government's Blue Economy policy, the budget makes allocations for expansion of shipping and inland waterways infrastructure along with ₹2,000 crore for PPP model in all major ports. In another section it discusses the need for the conservation of deep ocean biodiversity. Neither policy documents nor budget allocations recognize that these priorities could be in conflict. This is already visible in several new proposals including those proposed in the Little Andaman Islands or in the west coast in places like Karwar and Dahanu," said Kanchi Kohli, legal researcher, Centre for Policy Research.

Environment ministry was allocated ₹3,100 crore for various programmes, including control of air pollution in Budget 2020-21. The revised estimates for 2020-21 was ₹2,015 crore and the new budget estimates for 2021-22 is ₹2,869 crore.

The newly formed Commission for Air Quality Management in National Capital Region and adjoining areas got a budget provision of ₹20 crore for its activities.

Disclaimer: This article first appeared on Hindustan Times, and is published by special syndication arrangement