Context:
The Union Budget continues to integrate climate action into economic planning, allocating funds for Carbon Capture, Utilisation and Storage (CCUS), renewable energy, and green technologies. However, implementation challenges and limited private investment remain concerns.
Key Highlights:
Budgetary Allocation
• Government proposes ₹20,000 crore over five years for CCUS technologies.
• PM Surya Ghar Muft Bijli Yojana receives ₹22,000 crore allocation in the current budget.
Policy Areas of Focus
• Green hydrogen development
• Decentralized solar energy
• Greening irrigation pump sets
• Decarbonisation of heavy industries such as:
- Cement
- Steel
- Aluminium
- Fertilizers
Climate Policy Evolution
• Earlier budgets focused on solar photovoltaic manufacturing with ₹4,500 crore allocation.
• Current focus is shifting toward industrial decarbonization and clean energy scaling.
Global Trade Pressures
• The EU Carbon Border Adjustment Mechanism (CBAM) imposes carbon tariffs on imports.
• Indian exporters of steel and aluminium face pressure to reduce emissions.
Technology and Implementation Challenges
• CCUS technologies remain expensive, with limited success globally.
• Countries like Norway, Canada, and the U.S. have experimented with CCUS deployment.
Energy Transition Measures
• Rooftop solar expansion under PM Surya Ghar Muft Bijli Yojana aims to:
- Reduce transmission losses
- Lower household electricity costs
- Reduce pressure on land and centralized infrastructure.
Relevant Prelims Points:
- Carbon Capture, Utilisation and Storage (CCUS)
- Technology to capture CO₂ emissions from industrial sources and store or reuse them.
- PM Surya Ghar Muft Bijli Yojana
- Scheme promoting rooftop solar installations for households.
- Aims to reduce electricity costs and expand renewable energy adoption.
- EU Carbon Border Adjustment Mechanism (CBAM)
- A carbon tariff on imported carbon-intensive goods entering the European Union.
- Green Hydrogen
- Hydrogen produced using renewable energy sources, emitting zero carbon during production.
Relevant Mains Points:
- Importance of Climate-Focused Budgeting
- Supports India’s Nationally Determined Contributions (NDCs) under the Paris Agreement.
- Promotes low-carbon industrial transition.
- Industrial Decarbonization
- Critical for energy-intensive sectors like steel and cement.
- Necessary to maintain export competitiveness.
- Implementation Challenges
- High cost of CCUS technologies.
- Limited private investment due to technology risks.
- Institutional coordination issues.
- Economic Opportunities
- Expansion of renewable energy markets.
- Development of green technology ecosystems.
- Job creation in clean energy sectors.
- Way Forward
- Encourage public-private partnerships in climate technologies.
- Introduce carbon pricing mechanisms.
- Strengthen policy coherence between energy, industry, and climate policy.
UPSC Relevance:
• Prelims: CCUS, CBAM, renewable energy schemes.
• Mains: GS-III (climate change policy, green economy, industrial decarbonization).