India’s Union Budget 2024 presented last month by Finance Minister Nirmala Sitharaman brought many things to the fold, however, when it comes to the environment, it is a right step towards the country’s Net Zero goals at the right time. It balances bold initiatives with practical considerations, aiming for sustainable development and energy security.
Following the release of detailed guidelines under India’s Carbon Credit Trading Scheme (CCTS), the budget outlines a roadmap for “hard-to-abate” industries. These industries, which typically find it challenging to reduce emissions, will transition from focusing on energy efficiency to managing their emissions directly. This shift will be facilitated by carbon market instruments, a move welcomed by companies aiming to leverage carbon derivatives to minimize their environmental footprint. The Bureau of Energy Efficiency (BEE) – a government-run organization tasked with formulation and implementation guidelines of CCTS, has made great progress with the rules. Its chief, Saurabh Diddi, recently remarked at an event by the Ministry of New and Renewable Energy (MNRE) that the framework will be ready by the end of the year and carbon trading can begin in India in the compliance sector soon after by 2025.
The new CCTS regulations set mandatory GHG emission intensity targets for energy-intensive industries, established by the Bureau of Energy Efficiency (BEE), laying a solid foundation for effective emission reductions. The phased sectoral approach will start with nine key industries, ensuring a gradual and impactful rollout. A mention of this route of India’s carbon neutrality in the finance minister’s speech shows the importance of this sector for the Government of India. Entities exceeding their targets can earn and trade carbon credit certificates (CCCs), with the option to bank CCCs for future use, fostering flexibility and encouraging over-achievement. The National Steering Committee for the Indian Carbon Market will oversee the implementation, enhancing transparency and governance. This structured framework is expected to attract new participants (both foreign and national players) and drive significant emission reductions.
The budget also prioritizes urban sustainability. Through partnerships with state governments and multilateral institutions, the government will invest in water supply, sewage treatment, and solid waste management projects, fostering greener cities. This approach is expected to generate growth, particularly for sustainability solutions businesses in smaller cities, creating a ripple effect of positive environmental change.
Beyond carbon markets, the budget champions renewable energy adoption. The ambitious PM Surya Muft Ghar Bijli Yojna aims to install rooftop solar panels on 1 crore households. This large-scale initiative will not only propel India’s position as a leader in green energy transition among developing nations but also encourage public participation in reducing carbon emissions. Promoting pumped storage projects strengthens the integration of renewable energy sources into the national grid, solidifying India’s commitment to a sustainable energy future.
The budget acknowledges the importance of innovation and energy independence. Minister Sitharaman emphasized research and development of small modular nuclear reactors alongside advanced power plants. These advancements highlight the government’s pursuit of high-efficiency and cutting-edge energy solutions. Notably, the endorsement of nuclear energy marks a crucial step in shaping India’s path towards energy security.
The agricultural sector has also received a sustainability boost. The budget emphasizes natural farming, climate-resilient practices, and the development of new, high-yielding crop varieties, showcasing a well-rounded approach to sustainable development. Agricultural sustainability is crucial for India due to its large population and dependence on agriculture. With growing pressure on land, water, and other resources, sustainable practices are essential to ensure food security, protect the environment, and improve farmers’ livelihoods. Sustainable agriculture helps conserve soil health, manage water efficiently, reduce chemical inputs, and enhance biodiversity. It also builds resilience to climate change, ensuring a stable food supply for a growing nation.
The launch of the Critical Mineral Mission underscores India’s focus on securing future resources. This mission aims to strengthen domestic production, recycling, and acquisition of critical mineral assets. The emphasis on extended producer responsibility ensures producers play a proactive role in managing the lifecycle and recycling of these critical minerals, promoting a circular economy and minimizing environmental impact.
While acknowledging the potential for faster progress, the budget represents a substantial leap forward for India’s journey towards a sustainable future. It effectively balances bold ambitions with the practical considerations of a developing nation, paving the way for a greener and more secure tomorrow.
