The interim budget’s proposals for voluntary gap funding (VGF) for offshore wind projects and mandatory blending of compressed biogas (CBG), reinforce the government’s attempt to accelerate the transition towards clean energy sources.

Finance Minister Nirmala Sitharaman in her Budget speech said VGF would be provided to harness offshore wind energy potential for an initial capacity of one gigawatt (GW).

Director of the CEEW Centre for Energy Finance (CEEW-CEF), Gagan Sidhu, said: “As per CEEW’s analysis, while 65 per cent of the $10 trillion in investments required for India to achieve net-zero by 2070 can be mobilised from conventional sources, the balance 35 per cent will need interventions. Further, wind as a generation source is critical for our nearer-term energy ambitions. In fact, as per the CEA’s own assessment, wind capacity would have to grow 2x from its current 44.7 GW to 100 GW by 2030 to meet the expected increase in power demand by then.”

On the government’s commitment to achieving Net Zero by 2070, the Finance Minister said coal gasification and liquefaction capacity of 100 tonnes will be set up by 2030. This will also help reduce imports of natural gas, methanol, and ammonia.

ICRA Senior VP & Group Head (Corporate Ratings), Girishkumar Kadam, said implementing a 100-tonne coal gasification and liquefaction facility will improve availability of domestic synthetic natural gas and lower import dependency on ammonia and methanol in the long run.

Sitharaman said: “Phased mandatory blending of CBG in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes, will be mandated. Financial assistance will be provided for procurement of biomass aggregation machinery to support collection.”

Besides, a new scheme for bio-manufacture and bio-foundry has been proposed, which will provide environment-friendly alternatives such as biodegradable polymers, bio-plastics, bio-pharmaceuticals and bio-agri-inputs, she added.

Praj Industries CEO & MD, Shishir Joshipura, said the proposal for financial assistance for biomass collection and equipment will help build a resilient feedstock supply chain. This will ensure the availability, accessibility, and affordability of bio-based feedstocks, inspiring investors’ confidence in setting up bio-refineries.

The Indian Biogas Association Chairman, Gaurav Kedia, said financial assistance for procurement of machinery for biomass schemes will support the use of biomass to convert into CBG.

EverEnviro Resource Management MD and CEO, Mahesh Girdhar, said the launch of bio-manufacturing and bio-foundry schemes, along with financial assistance for biomass aggregation machinery, reflects the government’s holistic approach towards promoting green growth and supporting the ‘Waste to Wealth’ mission, he added.

To expand the electric vehicle (EV) ecosystem, the government has proposed greater adoption of e-buses for public transport networks, which will be encouraged through a payment security mechanism.

CRISIL Ratings Director, Gautam Shahi, said setting up a payment security mechanism, and emphasis on increasing support for the manufacture of charging infrastructure are steps in the right direction for improving the adoption of e-buses for public transport networks. CRISIL Ratings expects penetration of electric buses to double to around 8 per cent by FY25, from around 4 per cent in FY23.